Teleflex Incorporated Stock

Good morning, ladies and gentlemen, and welcome to the Teleflex Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

And now I'll turn the call over to Mr. Lawrence Keusch. Vice President of Investor Relations and Strategy Development. Please go ahead.

Good morning, everyone, and welcome to the Teleflex Incorporated Second Quarter 2026 Earnings Conference Call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details. Participating on today's call are Jason Weidman, President and Chief Executive Officer; and John Deren, Executive Vice President and Chief Financial Officer. Jason and John will provide prepared remarks, and then we will open the call to Q&A.

Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K which can be accessed on our website.

Now I'll turn the call over to Jason for his remarks.

Thank you, Larry, and good morning, everyone. Let me begin by saying it's been a great start to my time at Teleflex. Over the past 2 months, I've really focused on learning our business, our products and our organization. This has meant considerable time visiting many of our sites around the globe, meeting with employees across the organization, engaging with customers and physicians and reviewing the company's portfolio, operating priorities and long-term growth opportunities.

While it's still early, a couple of things have stood out immediately to me. Our employees are fantastic. They're dedicated. There's real pride and belief in what we do for patients, and they're eager to build on our accomplishments and drive execution. Second is the strength of Teleflex's underlying businesses, we have great products with market-leading positions in many important categories, strong brands and a substantial global commercial footprint.

My initial observations have also reinforced my belief that there is substantial opportunity ahead for Teleflex and that we have the right foundation to capture this potential. We remain focused on executing key initiatives underway, including completing the announced divestitures, deploying the proceeds through our committed debt reduction and share repurchase initiatives and mitigating stranded costs associated with the divestitures. Taken together, these actions will create a more focused portfolio give us greater exposure to core critical care and high acuity hospital markets and further strengthen Teleflex's financial and strategic flexibility in its next phase of growth. The divestitures and capital allocation plans reflect a thoughtful and proactive approach to value creation, but realizing our full potential will require continued deliberate action and consistent execution across the company.

As I step into this role, my top priority is to thoroughly assess the business and to develop the strategic and operational plan that focuses our resources on the areas where we see the greatest opportunities for sustainable growth, innovation and operational leverage with the objective of maximizing value for our shareholders. While this review is ongoing, like most medical device companies, the focus will center on operational rigor and predictability across the organization, accelerating growth in innovation-driven platforms and ensuring disciplined and balanced capital deployment. I look forward to partnering with the leadership team and our employees to build upon the strong foundation that's already in place and continue advancing Teleflex's transformation into a more focused medical technologies leader with durable long-term growth.

Now I'd like to transition to the second quarter highlights. Our overall pro forma adjusted constant currency growth was 4.7%, while adjusted operating margin was 19.6%. We delivered better-than-expected revenue, adjusted margin and adjusted EPS with excellent performance in the Vascular and Surgical businesses in particular. At the same time, Interventional performance fell short of our expectations as the integration associated with the VI acquisition is taking longer than anticipated. As John will discuss, we have updated our full year revenue outlook to reflect a more tempered expectation for Interventional growth while maintaining our adjusted operating margin outlook and increasing our adjusted EPS guidance.

We've previously emphasized that 2026 would be a transition year for Teleflex as we become a stronger, more focused company for the future. To that end, I'm pleased to share that we're making significant progress on our strategic transformation and our commitment to maximizing shareholder value. In December of 2025, we announced agreements to sell the Acute Care, Interventional Urology and OEM businesses as part of our overall transformation plan. As announced early this week, we have successfully closed the OEM divestiture which resulted in proceeds of approximately $1.5 billion in estimated after-tax proceeds of $1.25 billion.

The OEM strategic divestiture generates the majority of the proceeds from the planned strategic divestitures and will fund both debt reduction and share repurchase. John will get into more details on the use of proceeds from the OEM close and capital allocation in a few minutes.

Turning to the Acute Care and Interventional Urology divestiture, we remain confident in closing the transaction. As previously disclosed, the FTC issued a second request in March, seeking additional information in connection with its review of the transaction. Both parties are working cooperatively with the FTC. The strategic divestiture is currently anticipated to be completed in the fourth quarter of 2026, although the timing is dependent on the regulatory approval process and remaining steps to complete the transaction.

As I focus on durable future growth, driving innovation is a key priority for Teleflex. I am excited about the new product opportunities we are developing, and over the past several quarters, we have deliberately increased our R&D investment with R&D expense at 7.9% of sales in the first half of 2026. As I look ahead, we will focus on effectively allocating capital to new R&D opportunities that fortify our existing product portfolio, leverage our call points and are accretive to our long-term growth profile.

Importantly, we have had a number of exciting new product innovation developments recently, including the late July BLA approval from the FDA for EZPLAZ freeze-dried plasma as well as the achievement of important clinical trial milestones for Freesolve, our novel drug-eluting resorbable magnesium scaffold. EZPLAZ, which will expand the emergency medicine portfolio in our Vascular business, represents a novel solution to administering plasma to critically injured patients in combat and prehospital settings.

Approved for the treatment of adults with uncontrolled bleeding resulting from traumatic injuries when plasma is required and other plasma products are not available. EZPLAZ is the first freeze dried plasma licensed by the FDA. EZPLAZ uses an innovative, flexible plastic bag technology that enables quick and efficient reconstitution of freeze-dried plasma. It fills an unmet need by enabling the transfusion of plasma in situations where it is critically needed. Including on the battlefield or on air and road ambulances, where the use of traditional plasma products is limited by logistical and operational challenges.

Turning to the future for the Interventional business. and as part of our commitment to increasing R&D investment in innovative technologies. We continue to advance our clinical study program with a highly differentiated Freesolve drug-eluting resorbable magnesium scaffold technology. Freesolve pairs temporary scaffolding with drug delivery to target a long-sought goal in Interventional cardiology and is anticipated to address the rapidly growing trend in coronary and endovascular procedures towards treatments that leave nothing behind.

During the second quarter, we announced several milestones from the Freesolve clinical program. 4-year follow-up data from the single-arm BIOMAG-I study were presented in May at the Paris Course of Revascularization, demonstrating sustained long-term performance and a favorable long-term safety profile of Freesolve. We also announced the completion of patient enrollment ahead of schedule for the BIOMAG-II study, which is the first randomized controlled trial for Freesolve run outside of the United States. This positions us for a late 2027 data readout.

Finally, we commenced the BIOMAG-III randomized pivotal trial in the U.S. with the first patient procedures completed in June at the MedStar Washington Hospital Center. While this comprehensive clinical program is still in its early phases, we are encouraged by the data to date and excited about the optionality that Freesolve provides us in the future.

In summary, taken together, all of these updates and actions reflect a more focused portfolio, disciplined capital allocation and innovation progression. We believe they position Teleflex to deliver improved execution and stronger long-term performance. We are building a clear financial profile and path to value creation through improved adjusted margins, lower interest expense and stronger adjusted earnings per share over time. 2026 remains a transition year for the company, and our transformation is well underway with tangible milestones being met, including the close of the OEM strategic divestiture and return of capital to shareholders. As we continue to execute on our priorities, we expect a meaningful step-up in our financial performance in 2027 and beyond.

Now let's move on to our second quarter continuing operations detailed results and updated financial guidance for 2026 all growth rates that I referred to are on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Pro forma adjusted constant currency growth for 2026 excludes the impact of foreign exchange, the $9 million Italian payback measure recorded in the second half of 2025 and the impact of approximately $14 million in continuing operations product revenue that was discontinued at the end of 2025 due to a strategic realignment, but includes revenue generated by the acquired Vascular Intervention business for the prior full year period. All comments relate to continuing operations for the second quarter of 2026.

For the second quarter, Teleflex revenues were $570.3 million, up 28.9% year-over-year on a GAAP basis and up 4.7% on a pro forma adjusted constant currency basis. In the quarter, our revenue performance reflected strong execution in our Vascular and Surgical businesses, partially offset by the performance of our Interventional business which was impacted by integration and restructuring activities related to the VI business. Second quarter adjusted earnings per share was $1.76 a 1.7% increase year-over-year and ahead of our expectations.

Now let's take a deeper dive into our second quarter revenue performance. I will begin with a review of our revenues by global product category for the second quarter. Starting with Vascular. Revenue was $246.3 million an increase of 8% year-over-year, primarily driven by growth in our hemostatic products and in our central access portfolio. In our Surgical business, revenue was $112.1 million, an increase of 9.2%, which was primarily driven by strong performance in ligation clips, our instrument portfolio and skin stapling.

Moving to Interventional. Revenue was $211.9 million, a decrease of 1%, while several categories, including hemostatic products, right heart catheters, intraosseous and complex catheters, outperformed, growth was softer than expected in the quarter, reflecting ongoing integration and restructuring activities associated with the VI acquisition. Although 2026 was always expected to be a transition year, the integration in the quarter was slower than anticipated, reflecting several transition factors that we expect to be temporary.

We are making progress on mitigation actions to address the primary drivers of these temporary impacts. And we remain confident in the long-term strategic and financial prospects for this business. That said, while the original plan contemplated that the integration would be largely completed towards the middle of 2026, we believe it is prudent to extend the time line for full integration through the second half of 2026, given some of the lingering transition issues still impacting the business.

I've spent the last 20 years of my career working in the Interventional space, and that experience gives me real conviction in the opportunity ahead for Teleflex. At a high level, the legacy Teleflex Interventional and acquired Vascular Intervention business fit together very well and with highly complementary product portfolios and geographic strengths. I believe that these are the right assets for Teleflex to expand its presence in Interventional coronary and peripheral procedures.

Drilling down a bit more. We have great products. a broad portfolio that includes specialty devices that physicians rely on and appreciate. I see meaningful opportunities to gain share, expand geographically and bring new products to market including through our innovation pipeline, which features differentiated products like Freesolve. As we actively work through the 2026 transition year, my focus is on positioning the business for success in 2027 and beyond. My broader review is ongoing, but my immediate priorities are clear, complete the integration associated with the VI acquisition and position Teleflex for improved growth as we continue the overall transformation of our business.

That completes my comments on the second quarter revenue performance. Now I'd like to turn the call over to John for a more detailed review of our financial results. John?

Thanks, Jason, and good morning. All results that I speak to will be on a continuing operations basis for 2026. Through the reclassification of discontinued operations, historical continuing operations reflect the impact of stranded costs in all periods presented.

Given Jason's previous discussion of revenue, I'll begin with margins. For the second quarter of 2026, adjusted gross margin was 61.7%. The 280 basis point decrease year-over-year was primarily due to the adverse impact of tariffs and the addition of the Vascular Intervention business which has a slightly lower gross margin than the corporate average. Of note, there were no recognition of IEEPA tariff refunds in the second quarter. Second quarter 2026 adjusted operating margin was 19.6%. The 520 basis point decrease reflects year-over-year gross margin pressure and higher operating expenses associated with the acquired Vascular Intervention business as well as increased R&D investment.

Adjusted net interest expense totaled $26.5 million for the second quarter as compared to $20.3 million in the prior period. The year-over-year increase is primarily due to the borrowings used to finance the Vascular Intervention acquisition and a portion of the open market share repurchases in the second quarter of 2026, partially offset by lower interest rates. Our adjusted tax rate for the second quarter of 2026 was 9.9% as compared to 14.1% in the prior period.

The year-over-year decrease is primarily due to the beneficial tax provisions included in the One Big Beautiful Bill Act increased utilization of U.S. tax credits and favorable jurisdictional mix in the quarter. At the bottom line, second quarter adjusted earnings per share was $1.76, representing a 1.7% increase year-over-year. The year-over-year increase was primarily due to a lower share count and tax rate and to a lesser extent, higher adjusted operating income, partially offset by tariffs and higher interest expense.

At the end of the second quarter, our cash and cash equivalents and restricted cash equivalents balance was $316.9 million as compared to $402.7 million as of year-end 2025. Net leverage at the end of the quarter was approximately 2.8x, up slightly from the first quarter, primarily driven by borrowings to fund the share repurchases completed during the second quarter. Pro forma net leverage for the OEM strategic divestiture was approximately 1.9x.

Turning to our capital allocation strategy. We remain committed to returning cash to shareholders under our previously announced $1 billion share repurchase authorization while reducing debt by $800 million. To accelerate the return of capital to shareholders. During the second quarter, we repurchased approximately 1.9 million shares of our common stock for $250 million through open market transactions at an average share price of $130.85. With the close of the OEM strategic divestiture, I am pleased to announce that we intend to commence an additional $250 million accelerated share repurchase on August 7.

The remaining net proceeds from the OEM strategic divestiture were primarily used to pay off the $700 million Term Loan A-2 associated with the acquisition of the Vascular Intervention business. and we will replenish funds deployed for the $250 million share repurchase that was completed during the second quarter.

Turning now to our financial guidance framework. As we previously indicated, 2026 results include a number of transient factors related to our strategic divestitures that will impact our near-term results, which we expect to be mitigated with the close of both transactions. Therefore, we anticipate 2027 will be more reflective of the underlying business, ultimately building a clearer financial profile with significant improvements in adjusted margins, interest expense and adjusted earnings per share. As previously announced, we have also launched a multiyear restructuring plan that is expected to achieve approximately $50 million in annual pretax cost savings upon completion in mid-2028.

The restructuring activities, which are on track began in the first quarter of 2026, and our guidance continues to assume savings from these activities will accelerate in the second half of the year. We are also identifying further cost reduction opportunities and remain committed to mitigating the stranded costs associated with the strategic divestitures.

With that context, I will review items that will impact our 2026 results. First, our assumptions for 2026 continued to reflect the impact of stranded costs, partially offset by TS agreements associated with the recent close of the OEM strategic divestiture. Of note, the TS and MS agreements associated with Acute Care and Interventional Urology strategic divestitures are more expansive than those for OEM due to the buyer requiring more support, which will drive adjusted margin expansion in 2027 as we offset stranded costs.

Second, the exact timing of the closing of the Acute Care and Interventional Urology strategic divestiture will pace our ability to deploy additional capital during the remainder of 2026. Third, our 2026 adjusted gross margin assumption does not reflect any benefit from IEEPA tariff refunds. As we look forward to 2027 and beyond, we anticipate our capital deployment actions in combination with the impacts of the TS and MS agreements and our efforts to further mitigate stranded costs and rightsize the organization will result in a significant increase in our adjusted operating income, adjusted margins and adjusted EPS.

Moving to an update on our 2026 guidance. Please note that our 2026 guidance is provided on a continuing operations basis and excludes the Acute Care, Interventional Urology and OEM businesses. We now expect pro forma adjusted constant currency revenue growth for 2026 to be in a range of 3.5% to 4.5% as compared to 4.5% to 5.5% previously. The updated guidance reflects the performance in the first half of 2026 and extended time line for the integration of the Interventional business and our expectations for the Vascular and Surgical business for the second half of the year.

Turning to adjusted earnings per share. We now expect an increased range of $6.90 to $7.20 in 2026 versus our previous guidance of $6.25 to $6.55. Our guidance includes the second quarter results, our updated expectations for the second half of 2026 including the benefit of the second quarter share repurchase activity and lower net interest expense. Our adjusted EPS guidance does not include any benefit from the proceeds resulting from the Acute Care and Interventional Urology strategic divestiture and the anticipated positive impact from additional share repurchases in the second half of 2026, including the $250 million ASR referenced earlier in my remarks.

Also for the avoidance of doubt, our adjusted EPS guidance does not assume a benefit of tariff refunds at this time. We will recognize the tariff refund upon full confirmation from the U.S. government. We anticipate these actions will result in meaningfully lower share count and significantly reduced interest expense in 2027 and beyond. Taken together, we expect share repurchase and balance sheet deleveraging activities will contribute to significantly higher adjusted EPS beginning in 2027.

Additionally, for modeling purposes, you should consider the following: the impact of foreign exchange for 2026 is still expected to be approximately $14 million tailwind to our pro forma adjusted constant currency revenue growth. We continue to expect our 2026 adjusted operating margin to be approximately 19%. As previously discussed, after addressing standard costs, we believe our steady-state margin profile will be approximately 23%. Looking forward, we see opportunities to improve upon that a state operating margin through operating leverage associated with revenue growth and other cost-saving initiatives.

Moving to assumptions below the line. For net interest expense, we now expect approximately $85 million for the full year 2026 as compared to the previous assumption of approximately $105 million. The change in outlook primarily reflects the $700 million debt reduction associated with our recent close of the OEM strategic divestiture as well as the opportunities to optimize our near-term borrowings. We now expect our adjusted tax rate to be approximately 12.25% in 2026 as compared to approximately 13.5% previously. Finally, we expect shares outstanding to approximate 43.3 million which excludes any benefit from the announced $250 million ASR.

That concludes my prepared remarks. I would now like to turn the call back to Jason for closing commentary.

Thanks, John. In closing, I will highlight our 3 key takeaways from the second quarter of 2026. First, Teleflex had a very solid second quarter. delivering better-than-expected revenue, adjusted margins and adjusted EPS. We expect continued solid performance in Vascular and Surgical in the second half of 2026, albeit at a more moderate growth rate than the first half. Alongside extended time lines to full Interventional integration. We have reduced our pro forma adjusted constant currency revenue growth guidance to reflect these dynamics with the low end of the range contemplating no improvement in Interventional revenues versus the second quarter for the remainder of the year in addition to typical third quarter seasonality.

Second, we are committed to returning significant capital to shareholders. accelerated share repurchase and debt reduction in the first half are driving an increase in adjusted earnings per share guidance. The recently completed OEM strategic divestiture fueled additional repurchases and debt reduction going forward. Third, we are continuing to successfully execute on our transformation to a more streamlined portfolio, which will position us for acceleration in 2027 and beyond. We expect meaningful increases in adjusted operating margin and adjusted earnings per share in 2027. Additionally, recent positive innovation milestones with EZPLAZ and Freesolve highlight our increased focus on future growth opportunities.

That concludes my prepared remarks. Now I'd like to turn the call back to the operator for Q&A.

[Operator Instructions] First question comes from the line of Vik Chopra of BMO Capital Markets.

Two for me...

Sorry, Vik. Just one moment, I'll get you back. Your line dropped off here.

We'll take the next one. Your next question comes from the line of Jayson Bedford of Raymond James & Associates.

Maybe just first for Jason. Jason, you're walking into a situation here where the strategy through transformative deals is largely set. Are there any pieces of the strategy that make you uncomfortable? And if you can point out any areas of opportunity that maybe were not clear when you stepped into the role?

Yes. Thanks, Jayson, for the question. Actually, one of the things I was really -- that really attracted me to Teleflex as I was looking from the outside was this transformational strategy. I thought that it was the right approach to provide better focus for the business. And as I've come in, I remain confident in that strategy. There is nothing that stuck out to me in these first 2 months that make me think that we're on the wrong path.

Obviously, we need to determine what the long-term path is beyond that. So I'm in the middle of that, what I would call my comprehensive assessment of the entire organization. And over the coming months here, we'll put together the long-term operational and strategic plan to really drive long-term durable growth and shareholder value.

Okay. And then just maybe as my follow-up, can you elaborate a bit more on the VI integration issues what is the issue? And what needs to happen to fully integrate the business?

Yes, great question. So the first thing I want to emphasize here is that this is absolutely not a product issue. So with the coming together of these 2 portfolios, the legacy Teleflex Interventional portfolio and the BIOTRONIK VI portfolio, they really fit beautifully together. And I think all of you guys know that I spent the last 20 years in the Interventional business. So I know this space well.

And what I can tell you is that when I took this role, I got countless numbers of messages, text messages and e-mails from KOLs in the space that basically said, "Wow, you have a great bag, we're excited to see what you do with it at Teleflex." So this isn't a product issue. What it is simply is just integration transitions that are continuing, that are transient that we need to work through. And I would primarily point to 3 areas. The first would be order-to-cash transitions. The second would be distributor transitions and the third would be sales force transitions. All of these are manageable. So if I start and go into a bit more detail from the OTC perspective.

So any time you change an ordering system for a customer no matter how smooth your internal transfer goes, and it was smooth for us, it's a change for the customer. And so there's an opportunity for disruption and confusion with them. And so that's what we are going through right now. We've identified where we have customer confusion and any lingering issues, and we're systematically working our way through those. What I can tell you is that the vast majority of our OTC transitions happened in Q2. And so that gives us a real good line of sight into how we can work through any of those lingering customer confusions.

The second is really about distributor transitions. And any time you move from one distributor to another, there's often a timing issue. So your original distributors start working down their inventory. And so they stop buying, and you haven't yet got to the point of the rebuy or the start-up buys for your new distributors. So obviously, we're closely tracking all of those transitions from distributor to distributor and making sure we drive to completion of those.

The final area is really about sales force transitions. When you bring 2 sales forces together, there's obviously going to be some territory realignment. And so you end up with some reps that have new customers. You end up with reps that have new products to sell. And in some cases, we found that we didn't have the right reps to sell this combined bag. And so we have open positions. And so we have a very comprehensive plan in place to make sure we have enhanced training as well as to make sure we have a very clear hiring plan, and we're always -- and we're already making really good progress against that hiring plan.

So again, I'd say all of these are transient issues related to the integration. And we have this really strong foundation of really great products. And trust me, I wouldn't be here if I didn't think that there was great opportunity in the Interventional business.

Our next question comes from the line of Vik Chopra of BMO Capital Markets.

Jason, you've had about 2 months to assess the business. I'm curious how quickly you expect to communicate the outcome of your strategic review? And should we invest -- so should we expect a formal long-range plan? And then I had a quick follow-up, please.

Yes. Thanks for the question, Vik. Obviously, as I said a couple of minutes ago here, one of my biggest priorities is really to fully assess the business and put together that long-range plan. I would -- I'm only 2 months in, so I need a little bit more time. I would expect that I'll have more to say and a little more color on opinions of future direction here by the next earnings call.

Okay. Great. And a quick follow-up on BIOTRONIK. I'm curious what level of confidence you have that the current time line reflects the full extent of the delay?

Yes. Yes. I think that when we look at -- as I said, the main causes of the integration delay we have mitigations in place, and we're already seeing progress in those -- in each of those factors. So we have pretty good confidence or really good confidence that we will -- we should be able to work through that by the end of the year. And thus, our guidance also reflects that.

Our next question comes from the line of [ Patrick Wood ] of UBS.

Amazing. I'll do 2 quick ones upfront. Just looking and thinking about the business, I know it's obviously a few months for you, but the guide implies ever so slightly more conservative second half, I think, like plus 3% or so. Is there any reason in your mind that midterm, there shouldn't be a business that can grow 4% or so? Is there anything that we might be missing, whether it's procedure environment or anything like that, that would preclude 4% plus is a reasonable midterm benchmark?

Yes. Thanks for the question, Patrick. I don't think there's anything major that you're missing here. And let me go back to the guidance and be really clear. So we -- as we look at this revised adjusted revenue growth guidance of 3.5% to 4.5%. This is for the full year and for all of RemainCo. And we're not going to guide on individual businesses. That said, the entire reduction in that guidance from previous guidance is due to this integration slowdown in Interventional.

Our next question comes from the line of Matthew Taylor of Jefferies.

This is Mike Sarcone on for Matt Taylor. I guess just a follow-up there on the guide. I think in the prepared commentary, you mentioned maybe some more moderate growth expectations in the back half of the year for Vascular and Surgical as well. Can you just kind of square that away and elaborate there versus your response to the last question around the guide?

Sure, no problem. So again, the reduction in the guide is solely due to what we see in Interventional. That said, we did provide some additional color in the prepared remarks to give you confidence in our ability to get to the lower end of the range.

And that was that -- the low end of the range really contemplates no growth in Interventional for the remainder of the year. And so take that Q2 revenue that we had in Interventional and assume that, that's what it would be for the remainder of the year with just some additional seasonality in Q3.

For the other 2 businesses, for Vascular and Surgical, we expect them to continue to perform really solidly. But they've been growing at a high single-digit rate through the first half of the year, which is fantastic, but these are not high single-digit growth markets.

So if we look at Vascular, for instance, we did see with some of our major distributors that inventories creeped up a little bit in H1. So we would expect that eventually that's going to normalize. If I turn to the Surgical business, when we get to the second half of this year, we just frankly face tougher comps. So if you look at H2 of last year, that's when we started to see some of the strength in the instrument portfolio.

Got it. That's helpful. And maybe just, can you comment on whether or not you've seen any impact from ACA subsidy expiration and just kind of patient demand and utilization?

We haven't seen any impact from that.

Our next question comes from the line of Jason Bednar of Piper Sandler.

I want to go back and double-click on those 3 buckets you stepped through earlier impacting the revenue outlook. The first 2, OTC and the distributor dynamics. Those to me, sound pretty manageable, very controllable. It's the last one, the sales force piece that I'd love to get your thoughts around that, just being fully resolved by year-end. As some of those roles are still open and in med tech, we've all seen that it takes a little bit of time on ramp-up.

So just given where we are in middle of the year, just your comfort or confidence around addressing that sales force piece.

Yes. I think that's a great question. I'm confident we can get through the hiring plan. I'm confident with our current reps, we can get through the enhanced training that we need to do. But as you know, in these spaces, typically, it takes a good 6 months or so to get a rep up to speed. So I would assume that our ramp-up is not going to be a step up but a ramp-up, exactly like you're saying.

All right. Helpful. And then I don't mean to ignore all the heavy lifting here in 2026, a lot of us are understandably trying to hone in also on where growth goes for '27, where EPS heads for '27. And just based on the margin normalization, capital deployment, all the things that are in play, it's not hard to see EPS move to something that's like $11.25 or $11.50 in that neighborhood for next year.

Jason, I know it's kind of my first call here. I just love to get your reaction to that.

Well, look, I'm going to -- I'll pass that one to John to talk about what our expectations are on the EPS. But, yes. Go ahead, John.

Yes. So obviously, we're not ready to guide 2027 yet. I appreciate your thoughts, and I don't know that I can confirm or deny your modeling, but I would tell you that with the 23% op margin from where we sit today that your numbers don't sound unreasonable.

Our next question comes from the line of Lawrence Biegelsen of Wells Fargo.

This is Nathan Treybeck on for Larry. Jason, CMS is changing the requirement for NTAP and TPT. Breakthrough designation is no longer eliminates the need to show a clinical advance to receive enhanced reimbursement. How does this impact Freesolve and where you might be able to price it?

Well, as you know, with those rules, it just eliminated the shortcut that you did not have to show superiority with -- if you had breakthrough device designation. And so we are aware that, that goes away and that pathway goes away. At the same time, we've got a lot of different scenarios we're looking at for Freesolve in the long term.

And certainly, we're looking at different measures of which we could also attempt to show that there could potentially be long-term superiority of that device. But regardless, this is regardless of where that NTAP or TPT ends up, we think that if this plays out clinically in the randomized trials, this is a great opportunity no matter what.

Great. And I do want to ask on Orsiro what percentage of Interventional revenue is it today? And is it declining at a similar rate to the overall DES market? And do you think you can change the trajectory for that product?

So the first thing I would say is we're not going to get in guide and specific or talk about growth rates of specific product lines. That's just not something we're going to do. I can speak generally about the DES market, which is, I would call it, approximately flat. So pricing is usually counteracting the PCI growth that's happening worldwide.

And what I would say about Orsiro is that it's got a pretty low share position, not because it's not a great product, but it just hasn't had the commercial bandwidth across the globe to really go after it. And so I do think that there's actually opportunity for us to outperform the market over time with this product. There's 70,000 patients studied with Orsiro. It's a good product. It has amazing data versus Xience, and I'm excited to see what we can do with it.

Our next question comes from the line of Mike Matson of Needham & Company.

So I want to start with one on EZPLAZ. So you appreciate the commentary there, but I didn't really hear much about the market opportunity. I think in the past, you talked about it being about $100 million potential market in the U.S. And then what about the timing of the launch and potential sales ramp?

Yes. Great question. So first, let me start with just saying that I'm really, really pleased with this landmark approval. And I think that it really demonstrates Teleflex's expanded commitment to innovation.

This is something that the company has been working on for more than a decade, and it is certainly not an easy project or an easy innovation. And so now we ended up as the first and only freeze-dried plasma that's licensed by the FDA. So I really wanted to compliment the team on that before addressing your question.

So look, with EZPLAZ, what I want to make clear is that our first and immediate priority here is the government and military market here in the United States. And there's a lot of work that needs to be done there. So the next steps for that are procurement solicitation with the Department of War, then we have to negotiate contract then we sign a contract and start to actually commercially deliver product. Now we're actively engaged in those conversations and they're going well. In 2026, I would anticipate that any revenue we get from EZPLAZ would be immaterial. But in 2027, it will be a contributor.

In terms of the long-term market, I am aware that in the past many years ago, the company had described this as a $100 million opportunity. As you can imagine, as being new to the role, I want to reassess how and our ability to go after new segments and what that total market opportunity can be. And I would say we're still in the middle of that. And so I would say it would be premature for me to comment on the total market opportunity over time.

Okay. Understand. And then in terms of Freesolve and the BIOMAG-II trial, which you're expecting results, I think, late next year, what's sort of at stake with that trial? So is it safe to assume that if the results are positive that, that's going to allow you to see sales kind of ramp more aggressively outside the U.S. where it is on the market in Europe and other places?

Yes. Great question. So as we think about Freesolve outside the United States, you're exactly right. It's not a -- or a sales ramp is not an approval issue. It's really a data issue or a lack of data and a guidelines issue.

And so we do not -- we have really great single-arm data so far with BIOMAG-I, which I would say is hypothesis generating. We hear great things from physicians, the device performs similarly to a conventional DES, the results in that single-arm study look like a conventional DES. But obviously, we need to see it in a randomized fashion. And so we did, as you said, we finished enrollment in BIOMAG-II, which is about 2,000 patients randomized versus Xience. We finished that ahead of schedule. So we will have a readout next year.

And so that should take care of this data question. And so we're anxious to see that and to really see how this performs versus DES. And then in terms -- but beyond that, I mentioned there's also a guideline issue. So the major guidelines outside the U.S. in cardiology are the ESC guidelines, European Society of Cardiology guidelines. And right now, those guidelines state that you should only use bioabsorbable scaffolds in a clinical trial setting. So even as we get through knock on wood positive data next year, we'll still have to work with ESC to make sure the guidelines get updated, but positive data should allow that to happen.

Our next question comes from the line of Anthony Petrone of Mizuho Financial Group.

And welcome, Jason. Pleasure to meet over the phone and hope you're doing well, John. One on procedure volumes, just broader question and 1 on capital allocation. All 3 segments could be used as a proxy for procedure volumes. Vascular organic is 8%, your Surgical is 9%. And obviously, Interventional, you have the organic growth down 1%. To what extent can you give us a little bit on U.S. procedure volumes? There's been some noise out there. HCA had inpatient admissions down some of the med tech companies are not seeing impacts. Some of them are. So what is the view from the Teleflex vantage point as it relates to U.S. procedure volumes into the back end of the year? And I'll have a follow-up on capital.

Yes, sure. So I mean, just in short, similar to what I said before is we're not really seeing any impact of procedure volumes. We don't think that, that's what's been driving the performance of our businesses.

And maybe on capital allocation, $250 million ASR. I think the prior target was $1 billion overall. So you did $250 million in a first share repurchase of $250 million post the OEM divestiture for an ASR and instead the debt buyback. So maybe just to recap on capital allocation, what will be the steady diet of share repurchases versus debt service. And of course, M&A was part of the Teleflex DNA. What are your thoughts, Jason, on M&A?

Yes, sure. So at a high level, we remain committed to the $1 billion share repurchase, the $800 million in debt reduction. So as you said, we completed the $250 million share buyback in Q2, the first $250 million, we announced the next $250 million ASR here to start tomorrow.

And then the remaining $500 million will likely use the proceeds from the Acute Care and Interventional Urology divestiture when that closes. From a debt reduction standpoint, we paid down $700 million with the OEM proceeds from -- and that was some debt that we incurred from the BIOTRONIK acquisition, and then we'll pay down the additional $100 million here of debt that we committed to by the remainder of the year.

In terms of your question on acquisitions, the first thing I would say is we've got a lot on our plate right now that we need to execute to, and that's what our focus is on. We need to make sure both of these divestitures get done. We need to make sure that we fully integrate BIOTRONIK and then we'll work from there. But generally, my philosophy, though, on acquisitions is that I would like these -- anything we look at would need to be tuck-in acquisitions to the businesses that we will have here in RemainCo. I'm not interested, at least in the short to midterm on anything that would be transformational.

Our next question comes from the line of Ravi Misra of Truist Securities.

Also relay my congratulations and nice to start working with you, Jason, over the coming quarters.

Just, I guess, my two, I'll ask them upfront. Can you talk maybe a little bit about Pantera Lux, kind of what's going on in the DCB ISR space? One of your competitors has been delivering pretty gangbusters growth in that segment. So I just want to understand how you're viewing the opportunity there? And then second, just I guess, on the vascular strength, there's growth acceleration despite some of the supplier headwinds that were mentioned. You kind of talked about some ordering patterns here. Can you maybe point us to, John, what kind of a stabilized end market looks like for this segment?

Yes. So first question on DCB. Yes, there's been -- DCB has been a great growth opportunity, particularly in the coronary space over the last couple of years. We see this is a growth segment for us within our Interventional business, and we see more opportunity around the world. We are looking at the different options for us to get our DCBs into the United States and to Japan because of some contractual items on these products, the Lux platform, it's not necessarily straightforward. And so we're still trying to work through what our different options are.

Let's see. So the other question was just about the Vascular segment and yes, and ordering patterns and where we saw the market stabilizing. So again, so we had really strong business in our performance in our Vascular business in H1. In particular, in the second quarter, I'll call out that our team did a fantastic job managing the lidocaine recall, which we thought could have been a negative for us in the quarter with the back order, but our team really, really managed through that in a great way. As I mentioned though, as we track the inventories of the major distributors, they've creeped up a little bit. And so we would expect them to normalize a little bit in the back end. At the end of the day, this is a mid-single-digit growth market.

Our next question comes from the line of Michael Polark of Wolfe.

Follow-up on the BIOTRONIK integration update. I'm just curious on the revenue, call it, disruption side. Is it legacy BIOTRONIK or is it legacy Teleflex or is it both? And is there a geographic area that stands out more Europe or U.S.?

So look, we don't get into product line details, but I think it's safe to say that the legacy -- or the BIOTRONIK BI acquisition revenue base was disproportionately impacted through the integration struggles.

And then a question on tariff refunds. I heard, John, none received, none in the guide, helpful. There are some companies that are reporting a receipt of such refunds in the second quarter. So why haven't you seen them? Do you expect them to come in the third quarter. Can you help us think about how you would treat those if and when they do come?

Yes. So we did see some refunds in this quarter, but they were not -- they were one somewhat split between RemainCo and NewCo, so between DO and CO. And they also related to 2025. So our non-GAAP policy will only recognize into earnings things related to 2026.

With that said, the only opportunity for 2026 refunds is approximately about $15 million that hit in Q1 and Q2. So when we do see those refunds come in, that amount would come back into earnings. I can't really speak to timing because it's a little unsure. We have submitted all the refunds, but that amount will come back into earnings, that $15 million. Right now, in total, we expect somewhere in the neighborhood in cash of about $39 million in refunds to Teleflex.

Our next question comes from the line of Travis Steed of Bank of America.

Just maybe as the new CEO, I'd love to have you talk about kind of your philosophy on creating shareholder value. And there's a lot of strategic and financial interest going on in med tech and there's standalone ways to do that and other ways to do it.

But like as a new CEO coming in and obviously a new -- kind of a new path year for Teleflex, would just kind of love to have you talk a little bit about your philosophy in particular, on shareholder value creation.

Yes. Thanks, Travis. So right now, I've got a lot to learn in this new job and in this new business. And so I've really been focusing on learning as much as I can. And like I said, the priorities have been to learn to really -- to focus on the execution of these big things that we've got to move, the divestitures, the integration, et cetera, and then to develop that strategic approach here on what we're going to do in the long term.

So again, I remain committed to what Teleflex has already put in place with the share repurchase and in the debt paydown. I'm also very committed to innovation and believe in organic R&D to drive shareholder value. And if you look at what we've done here at Teleflex in the first half, we're getting close to 8% of revenue for R&D as opposed to historical levels at 6%. But as I think about exactly how I want to approach capital allocation and any changes in the long term beyond that, I'd ask that you give me a little bit more time, I want the time to really fully assess every aspect of the business first.

That is all the time we have for questions today. I will now turn the conference back over to Mr. Lawrence Keusch for closing remarks.

Thank you, JL, and thank you to everyone who joined us on the call today. This concludes the Teleflex Incorporated Second Quarter 2026 Earnings Conference Call.

You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the Teleflex First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

And now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development. You may begin.

Good morning, everyone, and welcome to the Teleflex Inc. First Quarter 2026 Earnings Conference Call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Stuart Randle, Interim President and Chief Executive Officer; and John Deren, Executive Vice President and Chief Financial Officer. Stu and John will provide prepared remarks, and then we will open the call to Q&A.

Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website.

Now I'll turn the call over to Stu for his remarks.

Thank you, Larry, and good morning, everyone. Before I review the first quarter 2026 results, I will provide an update on our strategic objectives and our commitment to maximize long-term shareholder value.

Teleflex has made demonstrable progress optimizing its portfolio and positioning the company for the meaningful opportunities ahead of us. In July 2025, we completed the acquisition of BIOTRONIK's Vascular Intervention business, expanding our coronary intervention portfolio and establishing a global footprint in the fast-growing peripheral intervention market. In December 2025, we announced agreements to sell the acute care, interventional urology and OEM businesses as part of our overall transformation plan, creating a more focused medical technologies leader with a higher forward revenue CAGR, greater exposure to core critical care and high-acuity hospital markets and a more focused portfolio across Vascular Access, Interventional and Surgical. These strategic divestitures remain on track to close in the second half of 2026.

On OEM, we reached an important milestone in March when the Hart-Scott-Rodino waiting period expired. We are focused on completing the remaining closing conditions with a target of closing in the third quarter of 2026. Separately, in March, Teleflex and the buyer of the acute care and interventional urology businesses each received a second request for additional information from the U.S. Federal Trade Commission. We are cooperating with the FTC and continue to expect that transaction to close in the second half of 2026.

We remain committed to using the proceeds from the divestitures to fund a share repurchase program of up to $1 billion and to reduce debt by $800 million, reflecting our disciplined approach to capital allocation and our focus on enhancing shareholder value and financial flexibility. We now expect to begin opportunistic share repurchases in the open market during the second quarter of this year, ahead of the previously anticipated timing of following the completion of the strategic divestitures. This action reflects our confidence in the value of the business, the progress we are making on our transformation plan and our commitment to disciplined capital allocation and long-term shareholder value creation.

Teleflex is also making progress on its strategic priorities, which include driving durable performance and building a clear financial profile through improved margins, lower interest expense and stronger adjusted earnings per share over time. In the first quarter, we met or exceeded our internal expectations for revenues, margins and adjusted EPS. Pro forma adjusted constant currency growth increased 5.1%, while adjusted operating margin was 18.1%. We remain focused on closing the sale transactions and delivering on our financial objectives for 2026 as well as building further momentum to drive sustainable growth and operating leverage.

As previously announced, we launched a multiyear restructuring plan that is expected to achieve approximately $50 million in annual pretax cost savings upon completion in mid-2028. Restructuring activities, which are on track, began in the first quarter of 2026 and savings are expected to accelerate in the second half of the year.

In April, Teleflex announced governance changes, including the nomination of Michael J. Tokich, former Senior Vice President and Chief Financial Officer of STERIS, to the Board of Directors as well as the intent to establish a new growth and operating committee of the Board. These actions reflect our continued focus on strong governance, thoughtful oversight and long-term performance.

Additionally, we announced that Dr. Stephen Klasko and John Heinmiller will conclude their respective terms on the Board at our upcoming Annual Stockholders Meeting. Dr. Klasko recently accepted a new significant health care leadership role, and Mr. Heinmiller is pursuing other professional interests. On behalf of the Board, I want to thank Steve and John for their meaningful contributions and dedication to Teleflex over their many years of service and wish them well in their future endeavors.

Effective following the annual meeting, Andrew Krakauer, who currently serves as the Chair of the Board's Comp Committee, will succeed Steve as Chair of the Board. Andy has served as a Director of Teleflex since 2018. He previously served as CEO and Board member of Cantel Medical Corporation from 2009 to 2016, which was an NYSE-listed provider of infection control products and services during his tenure. Taken together, these actions reflect a more focused portfolio, stronger governance, disciplined capital allocation and a clear path to value creation. And we believe they position Teleflex to deliver improved execution and stronger long-term performance.

Finally, I want to welcome Jason Weidman as Teleflex's next President and CEO, effective June 8. Jason is a proven medical technology leader with more than 25 years of industry experience and a strong track record of building and scaling businesses globally. His deep medical technology expertise and proven track record of driving growth, innovation and operational execution make him well suited to lead Teleflex through its next chapter and help accelerate the opportunities ahead. It has been an honor to lead Teleflex as Interim President and CEO, and I look forward to continuing to support the company as a member of the Board.

Now moving to our first quarter continuing operations results and updated financial guidance for 2026. All growth rates that I refer to are on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Pro forma adjusted constant currency growth for 2026 excludes the impact of foreign exchange, the Italian payback measure in the second half of 2025 of $9 million and the impact of approximately $14 million in continuing operations product revenue that was discontinued at the end of 2025 due to a strategic realignment, but it includes revenue generated by the acquired Vascular Intervention business for the prior full year period. All comments are related to the continuing operations for the first quarter of 2026.

For the first quarter, Teleflex revenues were $548.3 million, up 32.3% year-over-year on a GAAP basis and an increase of 5.1% on a pro forma adjusted constant currency basis. In the quarter, we demonstrated strong execution and to a lesser extent, also benefited from some timing of orders in our surgical instrument portfolio. First quarter adjusted earnings per share was $1.39, a 3.5% decrease year-over-year.

Early in the second quarter, we were notified that two third-party product suppliers had initiated a recall for certain components included in some of our vascular and interventional kits. We have identified actions to return our products to market and have a remediation program underway. We have included the necessary estimated cost provision within our first quarter results to remediate our current product stock. Although the actions for the remediation may result in some elevated back orders at the end of the second quarter, we do not currently believe that there will be a significant impact on our full year 2026 revenue guidance as we continue to focus on serving the needs of our customers.

Now let's turn to a deeper dive into our first quarter revenue performance. I will begin with a review of our revenues by global product category for the first quarter. Starting with Vascular, revenue increased 4.8% year-over-year to $236.8 million, was primarily driven by growth in our hemostatic products in our central venous and other access portfolio.

Moving to Interventional. Revenue was $204.7 million, an increase of 3%. Performance for the quarter was driven by intraosseous, right heart catheters and complex catheters. We are continuing our integration of the Vascular Intervention business, which closed early in the third quarter of 2025. In the first quarter, the sales forces of the legacy Teleflex Interventional and Vascular Intervention businesses were combined. As expected, we have experienced some disruption from the integration and restructuring activities, but we continue to anticipate improving momentum in the second half of the year based on our expanded presence and cross-selling opportunities in the cath lab.

As part of our commitment to increasing R&D investment for innovative new technologies, we continue to advance our clinical study for the Freesolve drug-eluting resorbable magnesium scaffold technology. Freesolve's combination of temporary scaffolding with drug delivery is anticipated to address the current trend in interventional cardiology and endovascular procedures towards leaving nothing behind. Recruitment for the BIOMAG-II study, which is a European pivotal trial for Freesolve, continues to outpace our assumption for the study, positioning us for a late 2027 data readout. We intend to expand our regulatory pathway for Freesolve in additional geographies, including the initiation of the BIOMAG-III pivotal trial in the U.S. during 2026.

In our Surgical business, revenue was $106.8 million, an increase of 9.9%, which was primarily driven by strong performance in our ligation clip and some timing of orders in our instrument portfolio. Instrument orders can be lumpy quarter-to-quarter, and we anticipate some moderation of growth in the second quarter.

That completes my comments on the first quarter revenue performance. Now I'd like to turn the call over to John for a more detailed review of our financial results. John?

Thanks, Stu, and good morning. All results that I speak to will be on a continuing operations basis for 2026. Due to the reclassification to discontinued operations, [ historical ] continuing operations reflects the impact of stranded costs in all periods presented.

Given Stu's previous discussion of revenue, I'll begin with margins. For the first quarter of 2026, adjusted gross margin was 61.4%. The 470 basis point decrease year-over-year was primarily due to the adverse impact of tariffs, quality remediation charges primarily associated with the third-party supplier disruption, as Stu mentioned earlier, higher logistics and distribution costs and the addition of the Vascular Intervention acquisition, which has a slightly lower gross margin than the corporate average.

First quarter 2026 adjusted operating margin was 18.1%, the 510 basis point decrease reflected the year-over-year gross margin pressure, higher operating expenses associated with the acquisition of the Vascular Intervention business as well as increased R&D investment, partially offset by the positive impact of foreign exchange rates.

Adjusted net interest expense totaled $24 million for the first quarter as compared to $17 million in the prior-year period. The year-over-year increase is primarily due to the borrowings used to finance the Vascular Intervention acquisition. Our adjusted tax rate for the first quarter of 2026 is 18.3% as compared to 16.4% in the prior year. The year-over-year increase is primarily due to higher tax expense associated with stock-based compensation.

At the bottom line, first quarter adjusted earnings per share was $1.39, representing a 3.5% decrease year-over-year. The year-over-year decrease is primarily due to tariffs, higher interest expense, partially offset by higher revenue and adjusted operating income, including the impact of the Vascular Intervention acquisition and higher R&D spending and a lower share count.

At the end of the first quarter, our cash equivalents and restricted cash equivalents balance was $329.6 million as compared to $402.7 million as of year-end 2025. Net leverage at the quarter end was approximately 2.5x.

Now turning to our financial guidance. As we have previously indicated, 2026 results include a number of transient factors related to our strategic divestitures that will impact our near-term results, which we expect to mitigate with the close of both transactions. Therefore, we anticipate 2027 will be more reflective of the underlying business going forward, ultimately building a clear financial profile with significant improvements in margins, interest expense and adjusted earnings per share.

With that context, I will review the items that will impact our 2026 results. First, our 2026 guidance reflects the fully burdened cost structure for RemainCo, inclusive of approximately $90 million of stranded costs, but does not include any positive impacts from the TSA or MSAs. Secondly, the exact timing of the closing of the strategic divestitures will pace our ability to deploy capital in 2026.

As a reminder, we expect to receive net proceeds of approximately $1.8 billion after tax from the divestitures. We remain committed to returning significant capital to shareholders through our previously announced $1 billion share repurchase authorization and our intention to repay $800 million in debt with the remaining proceeds from the strategic divestitures.

As previously disclosed, we expect to begin opportunistic share repurchases under the existing $1 billion authorization in the open market during the second quarter. Any such repurchases will be subject to prevailing market conditions and the company's operating cash flow needs. As we look forward to 2027 and beyond, we anticipate these capital deployment actions in combination with the impacts of the TSA and MSA arrangements and our efforts to further mitigate stranded costs and rightsize the organization will result in a significant increase in both our operating income and margins as well as our adjusted EPS.

Moving to an update on our 2026 guidance. Please note that our 2026 guidance is provided on a continuing operations basis, excludes the acute care, interventional urology and OEM businesses. We continue to expect pro forma adjusted constant currency revenue growth for 2026 to be in the range of 4.5% to 5.5%. Turning to adjusted earnings per share. We continue to expect a range of $6.25 to $6.55 in 2026.

Our guidance does not include the anticipated positive impact from our announced plans to repurchase $1 billion of our common stock and repayment of debt, which will be primarily funded with the proceeds from the strategic divestitures. We anticipate these actions will result in a meaningfully lower share count and significantly reduced interest expense in 2027 and beyond. Although we have not included the benefits of these actions in our 2026 adjusted EPS guidance, we continue to anticipate closing the strategic divestitures in the second half of 2026 with the OEM transaction expected to close in the third quarter. Taken together, we expect these factors will contribute to significantly higher adjusted EPS beginning in 2027.

Additionally, for modeling purposes, you should consider the following: the impact of foreign exchange for 2026 is still expected to be approximately $14 million. We continue to expect our 2026 adjusted operating margin to be approximately 19%, which reflects the full impact of approximately $90 million in stranded costs associated with the separation activities and no offsetting benefit from the TSA and MSA arrangements during 2026. In addition, I would also note that our 2026 operating margin is inclusive of R&D investment of approximately 8% of sales.

Of note, when taking into account the positive impacts of the TSA and MSA arrangements in terms of reducing the operating expense profile for continuing operations, we estimate that our underlying steady-state adjusted operating margin will be approximately 23%, which is 400 bps above our fully burdened adjusted operating margin guidance for 2026.

Looking forward, we see opportunities over the next several years to improve adjusted operating margin through operating leverage from revenue growth and other cost savings initiatives above our steady-state operating margin profile of approximately 23%.

Moving to assumptions below the line. Net interest expense is expected to approximate $105 million for full year 2026. Our estimate reflects the refinancing of our $500 million in 4.625% senior notes, which are due in November 2027 and does not assume any debt paydown associated with the after-tax proceeds from the strategic divestitures. Finally, we continue to expect our tax rate to be approximately 13.5% in 2026.

That concludes my prepared remarks. I would now like to turn it back to Stu for closing commentary.

Thanks, John. In closing, I will highlight our 3 key takeaways from the first quarter of 2026. First, Teleflex is in the midst of a transformation that optimizes our portfolio, creates a more focused medical technologies leader and positions our company for meaningful value creation opportunities going forward. We continue to make progress on the pillars of our strategic plan, which are expected to catalyze a strong financial profile beginning in 2027.

Second, we are pleased with the performance in the first quarter with pro forma adjusted constant currency revenue growth of 5.1% year-over-year, tracking towards our 2026 pro forma constant currency growth guidance of 4.5% to 5.5%. In addition, the first quarter performance is aligned with our mid-single-digit growth profile aspirations and represents a strong reflection of the durable growth potential of our go-forward business.

Third, we continue to expect our 2 strategic divestitures to close in the second half of 2026. We remain committed to return significant capital to shareholders through our $1 billion share repurchase program while also reducing debt to enhance our financial flexibility and support future growth and value creation.

We also remain focused on opportunities to offset the stranded costs from the separation initially through the recognition of transition service and manufacturing service fees of at least $90 million on an annualized basis and longer term through cost optimization. We have already initiated restructuring to drive approximately $50 million in after-tax savings and are actively assessing additional cost reduction programs.

With a more streamlined portfolio and clear strategic priorities, we will be well positioned to drive durable performance and long-term value for shareholders. We expect our financial performance to improve through 2026 and more fully capture the benefits of our efforts in 2027 and beyond with meaningful increases in adjusted earnings per share.

That concludes my prepared remarks. Now I'd like to turn the call back to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Mike Matson with Needham & Company.

So I wanted to ask one about the second quarter revenue growth expectations. I know you're not giving guidance, but there were a few things in the prepared remarks that seem to indicate growth could be a bit slower than kind of the annual growth, including this recall issue, the instrument order timing and then the interventional sales integration. So I don't know what you're willing or able to tell us on that, but are you comfortable with the consensus estimate of around $567 million?

So Mike, yes, to your first point, we're not guiding quarterly revenue. But yes, your observations around those things are -- we did say we would see accelerated growth in the second half of 2026. We still believe that. So we expect accelerated growth. So you can start doing the math through the P&L.

Yes, we do have these two recalls that could relate to some back orders, but it's really a bump in the road for us. For one of them, we already have product flowing for the larger one and the other one is really small, to be honest. So I think that while there's always some level of risk and there's going to be puts and takes, I think those are not going to be problematic for us for the full year. Yes, and we did see some instrument order timing for Surgical. We'll continue to see how that plays out throughout the year. So it's hard to tell you exactly that that's going to be a adjustment that could come in Q3, but it's possible it would be Q2 as well. But again, we're not guiding Q2 revenues, but that's all I can tell you on that.

Yes. Okay. I understand. And then just on the interventional sales integration that kind of kicked off in the first quarter, how much of that is being caused -- the disruption being caused by head count reduction versus just reshuffling of territories? Or is it a combination of both of those things?

So there's -- do you want to...

This is Stu, I'll take it. It's primarily your latter point, on the restructuring of territories. When we integrated the two sales forces, there's territory realignment, and that's the primary cause of that disruption.

And the next question comes from the line of Jayson Bedford with Raymond James.

Maybe just a somewhat unoriginal question, but you beat consensus estimates by about $0.17 in the first quarter. No change to the annual guidance. I appreciate there's a lot of factors going into guidance setting. But is the EPS guidance factoring in any new cost you're seeing in the business?

No. I mean, Jayson, it is early in the year. Again, lots of puts and takes throughout the quarters. Really happy about the performance in Q1. And so we've decided we're going to -- we'll maintain our guidance for the full year right now. We'll have better information as we go through the second quarter, and we'll be able to update as appropriate then.

Okay. Maybe just on the top line, growth across the three segments was fairly balanced. Surgical is obviously the outlier. I'm guessing comps were a factor. And obviously, there was a few puts and takes here on the Surgical side. But within the 4.5% to 5.5% growth guidance, can you just give us an idea of which segments lag, which segments drive the growth? And then maybe touch on some of the segment drivers here.

Yes. So look, I mean, I think we're happy with all of the segments. In Vascular, CVCs and hemostatics it did really well. Surgical, it's really around our Hem-o-lok and the instrument orders, as we noted. Interventional is doing really well with complex catheters, drug -- DCBs as well. So I think we're really happy with what we're seeing across the portfolio.

Again, we don't guide by product portfolio. So I'm not going to get too into that. We do see in the long term, Interventional will be the larger grower. I can't -- I won't signal that yet for 2026, but I think that, that is our expectation. We're putting a lot behind the Interventional product space. We're spending most of our R&D dollars there, and we think there's the opportunity for the most innovation there as well.

And the next question comes from the line of Matthew Taylor with Jefferies.

Maybe in terms of what you're expecting from costs for the year, can you help us maybe frame the input -- like the impact of any cost inflation across manufacturing and freight? Maybe help us understand like there's any margin headwind you're seeing today or something you expect in guidance for the year?

So nothing significant, honestly. We -- obviously, we have seen an increase in L&D costs as the Iran conflict moves on. We had a lot of contracts locked in place when it started. So it kept our L&D costs down in the beginning of the year. We have started to see that inflation as we got to the end of the quarter, and we think we have a lot of opportunities to offset it. So we actively have a number of continuing improvement process programs in place to offset that. So right now, we think our -- the risks that we see are within the guidance range we have given on operating margins.

And the next question comes from the line of Ravi Misra with Truist Securities.

So I'll just ask my question and follow-up upfront. First, can you provide a little bit more detail on kind of what the role of the new Board committee that you announced was? The growth in operations and kind of how that's going to be constructed in terms of who's on it?

And then second, just with Freesolve, it sounds like you commented to faster-than-expected enrollment in Europe. On BIOMAG-III in 2026, can you maybe level set expectations in terms of what you see based on those learnings on how long that will take to fill and maybe when we can get a readout there if everything goes well?

This is Stu. I'll take the growth and operating committee. We've got a Board meeting next week where we will put together the outline for that committee as well as the members. I think it's fair to say it will focus more specifically -- or in a little more detail on the operations of the company and specifically how we put our growth plans in place and how we monitor the execution of those plans.

And then, Ravi, it's Larry. Just on the BIOMAG trials. Yes, we, on BIOMAG-II in Europe, have been enrolling patients ahead of our expected schedule. and we will -- we are approaching the end of that enrollment period. We'll obviously let everyone know when we get that wrapped up. It is a 12-month follow-up from the last patient in. So that should give you some feel as to when we will see the conclusion of that study. And then obviously, there will be the analysis of the data. And we still expect that data to read out in 2027 in the latter portion of the year.

Relative to the U.S., as we have indicated, BIOMAG-III will initiate in 2026. It is a study protocol that is very similar to BIOMAG-II. So you should think about it in similar numbers of patients. We'll see how enrollment goes. Different geographies can be different. But I would anticipate that we'll see that data reading out probably sometime in something like 2030.

And the next question comes from the line of Anthony Petrone with Mizuho Group. We'll take our next question coming from the line of Shagun Singh with RBC Capital Markets.

So I believe Jason is starting June 8. Just ahead of his arrival, can you just talk about why he was the best fit for the company? And once he does take on the role, when can we expect to hear about the company's strategic vision? And is there a plan for an Investor Day? And then I have a quick follow-up.

Sure. Thanks for the question. So we're super excited to have Jason start. As we noted, he's going to start on the 8th. Prior to that, he's got some obligations with Medtronic, but he's clearly going to be actively involved with the company prior to officially starting.

Why did we pick them? Really, there were kind of 3 or 4 things. First, alignment with our culture and our values, those being really focused on ethics, integrity and accountability. Secondly, we wanted someone who's a proven growth leader. Jason clearly demonstrated that growth when he managed the stent portfolio at Medtronic.

Thirdly, we wanted someone who could manage through significant complexity. As you know, we're integrating BIOTRONIK and working on the sales of our businesses. And clearly, someone who's worked in Medtronic, which, as you know, is a giant, highly complex, a matrix organization, he's had a super successful career there. So he's obviously seen and managed through that complexity. And lastly, global perspective. He's operated with a very broad product portfolio throughout his career on a global basis. So those are kind of the key reasons we brought him here. I talk to him almost every day. He's excited to get started, and we're looking forward to having him.

Relative to an Investor Day, we don't have anything planned at the moment. We will certainly keep you informed of that after Jason gets on board and gets comfortable with the organization. It's something we've spoken about, and we will plan for some time in the future.

Great. And then just as a follow-up, I think last quarter, you provided some directional outlook into 2027. And I was just wondering if you could touch on that. On sales, the midpoint of the 5% growth, is that a good base case to use going forward?

And then on operating margins, I think ex stranded costs, you had indicated mid-20s, and you also indicated on your comments today that this year, there's about a 400 basis point on the burdened operating margin. So any directional outlook would be helpful.

Yes, Shagun, we did not provide any guidance on 2027. I think what we did provide, though, to your point, around a normalized operating margin was more in that 23% level once we account for the stranded costs. And we think we have a lot of opportunity to go above that as we continue to grow and we get some more leverage out of the P&L going forward. But I think that's the only thing we really guided to in -- for 2027.

Obviously, we've given you the components to think about in terms of buyback and interest expense and the benefits we'll be seeing in 2027, so -- for your own models. But yes, as far as top line goes, we're not prepared to start guiding top line until we get a little more into 2026.

And the next question comes from the line of Matthew O'Brien with Piper Sandler.

For starters, just maybe just bigger picture, there was a rumor about some interest in Teleflex either strategically or from a private equity perspective, and I'm not sure what you can share, but I heard that, seeing two Board members not standing for reelection. So I'm just wondering if the company was approached about a transaction, you looked at it as a Board said, no, it's not something that we're interested in and hence, the hiring of Jason or if those two pathways or factors are completely independent of each other? And then I do have a follow-up.

Yes. This is Stu. We don't comment on any market rumors and speculation. We made comments regarding these activities in our March 27 press release. So I'll just refer you to that for our comments.

Okay. Fair enough. And then maybe a question for John. And I know timing of repurchases is difficult to fully understand. But is it -- and it's a big number, $1 billion of repurchases here, but is this something that we think we could be done with by the end of this calendar year? Or do you think it will bleed into '27?

So given the size -- first of all, as a reminder, we are going to start doing some open market purchases in Q2, given where the stock price is at. We think there's an opportunity to do that. That's, of course, ahead of the proceeds. So no commitment as to how much we're going to buy back in the second quarter until we're able to close at least the first sale of -- which we expect to be the OEM transaction.

But given the size of the buyback, there is a good chance that, that purchases will continue into 2027. So if we just think about how the two sales will likely lay out and if you only thought about the proceeds from the sales, you'd likely be buying into the first quarter of 2027, just given the volume limits that we would have.

The next question comes from the line of [ Ross Osborn ] with Wells Fargo.

Starting out, how much of the $90 million in stranded costs has already flowed through during the first quarter? And is the quarterly cadence linear or back-half weighted?

I apologize. Your second part of your question again, if you could.

Just in terms of the cadence for the remaining stranded costs, should we expect a linear run rate? Or is it back-half weighted?

Think of it as a linear run rate. So stranded costs, right, it's -- there's not a great science to this. It's a concept, right? It's the overhead cost that we still maintain for all of Teleflex that we'll be able to -- we believe we'll be able to fully mitigate as -- once we separate the company. When you get into 2027 or even the back half -- back end of this year, once we have the TSAs and MSAs in place, they'll offset the stranded costs entirely. And then it's really about how these restructuring programs take care of them permanently.

So you can think about the stranded costs being around for likely the better part of this year until the fourth quarter once the TSAs and MSAs come into play. And they will not be an issue for 2027, and then we have to continue to work through to make sure they don't become an issue after 2027, 2028. So -- but they are in the numbers today, and they are in the comparative numbers, if you will, as we've restated everything for 2025.

Okay. And confirming the $90 million and how much was hit during the first quarter?

I'm sorry?

Confirming your guidance of $90 million of stranded costs and then how much flowed through during the first quarter?

Well, again, these are -- stranded costs are conceptual. They are part of your overhead, your corporate overhead and the like. So they're not specific identified cost in that sense, right? So think about them ratably, I guess, I would say, right, as you go through the year.

The next question comes from the line of Michael Polark with Wolfe Research.

Follow-up on Interventional, 3% pro forma constant currency growth in the quarter. That's below target of mid-single digits plus. I heard some puts and takes. I just want to understand the quarter specifically being slightly below target growth. Is that the sales force integration disruption? Is that the third-party supplier recall? Or is there something else you'd have us consider?

No. It's -- so we have -- we expected the first half of the year to be slower than the back half for Interventional specifically due to -- there's two things. One, we did a major restructuring. We announced a major restructuring at the end of Q4 related to the VI acquisition. That starts taking place, obviously, in Q1. So the actions were taking place as well as some of the disruption that Stu has already mentioned. So those really are the items I can talk about. And so we view them as transient in the Q1 going in a little into Q2, and then we expect the back half of the year to recover nicely after we kind of get through that transition.

My follow-up on Surgical, the upside growth in the quarter, timing of orders for instruments heard that loud and clear. Are you launching new products there? Do you think that's share gain? Or is it truly timing? And the second piece of that is, does the comment include orders for the bariatric stapler? If it doesn't, I'm curious just for an update on how that product is performing given the market channel.

Surgical did very, very well, and I think they'll continue to do well. We did well across the product portfolio. Hem-o-lok did well. The bariatric stapler did well. It's on a much lower base. The instrument orders have done well throughout the year. That's definitely -- that's really the only timing issue in the quarter. Everything else was really strong performance for Surgical. So we've been -- we're really pleased with the quarter, and we see some nice opportunities as the year plays out.

The next question comes from the line of Bradley Bowers with Mizuho.

I'm on for Anthony. Just maybe a two-parter here. Just wanted to double-click on Interventional. Obviously, modeling is a little choppy, but it was the only one that was a little bit short of our model, but obviously, the ramp is expected. So I wanted to hear about line of sight on the integration and how you expect that to ramp and exit 2027.

And then admittedly, this is a little bit picky, but hear about a new CEO coming in, experience in complex businesses, but the recent Teleflex transactions are about making you guys more streamlined. So I wanted to hear about puts and takes. Obviously, the skills translate, but just wanted to kind of hear about the mindset and the ongoing go-forward Teleflex.

Okay. Well, I'll let Stu handle the CEO comment. But I think at the end of the day, it's consistent with what I've said previously, the first half of the year, we expected to be a little lower in growth because of the transition and the restructurings that we talked about. And again, we expect accelerated growth in the back half of the year. It's best I can give you. Again, we're not guiding by quarter, and we're not guiding by business. With that, I'll ask Stu to answer the other question.

Yes. I think with Jason coming on board, again, we're very excited to have him. What I didn't say earlier, we really like the breadth of his experience at Medtronic, both in the cath lab and the peripheral business. So he's had experience in stents, drug-coated balloons, coronary catheters, peripheral catheters. So we like that product experience and the growth he demonstrated at Medtronic in all of those positions makes us really comfortable that he's going to be helpful in helping us drive accelerated growth as we go forward.

The next question comes from the line of Travis Steed with BofA Securities.

Maybe at a higher level, just curious how you think about considering kind of all avenues for shareholder value creation and kind of balanced risk-adjusted shareholder returns and going versus going through kind of your longer-term strategic plan. Just would love to kind of hear high-level thoughts on that.

Yes. This is Stu, I think I'll again refer back to our previous public statements, particularly regarding -- we have said publicly, we'll thoroughly and thoughtfully consider any bona fide acquisition proposal. We're looking at all long-term value creation and how we can best deliver that. So the Board is open and considering and has been very thoughtful in that approach.

Great. That's fair. And maybe on tariffs, what's assumed on tariffs in the guidance? And if you get refunds, is that upside to the guidance?

Yes. refunds would be upside for the guidance. I think we're where most players are right now with what I would call is like a contingent gain model. So waiting for the tariff actually to -- or get confirmation that we will get the tariffs when we apply for them. So there is definitely upside.

Right now, we have about $33 million of tariffs in the full year guidance. So there would definitely be some upside for those refunds. Keep in mind, some of the refunds would be in -- for 2025, what we paid. And then because it gets capitalized and rolled into 2026, there'd be a clear benefit in 2026 for the first 2 quarters.

And that concludes our question-and-answer session. I would like to turn it back to Mr. Lawrence Keusch for closing remarks.

Thank you, Priva, and thank you to everyone that joined us on the call today. This concludes the Teleflex Inc. First Quarter 2026 Earnings Conference Call.

You may now disconnect your lines.

Good morning, ladies and gentlemen, and welcome to the Teleflex Year-end 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

And now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development. Lawrence?

Good morning, everyone, and welcome to the Teleflex Inc. Year-end 2025 Earnings Conference Call. The press release and slides to accompany this call are available on our website at teleflex.com. In addition, we have provided supplemental non-GAAP income statement information for 2025 continuing operations in the appendix of our slide deck, which can be found on our Investor Relations website. As a reminder, a replay will be available on our website, those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Stuart Randall, Interim President and Chief Executive Officer; and John Darren, Executive Vice President and Chief Financial Officer. Stu and John will provide prepared remarks, and then we will open the call to Q&A.

Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website.

Now I will turn the call over to Stu for his remarks.

Thank you, Larry, and good morning, everyone. In January, I stepped into the role of interim CEO. As a reminder, the Board made its decision to transition the Chief Executive Officer position following the announced sale of our acute care, Interventional Urology and OEM businesses and as Teleflex enters its next phase as a more focused, higher growth organization. We remain grateful for Liam Kelly's impactful leadership and the significant contributions he made during his tenure. The Board is actively conducting a CEO search with the support of Spencer Stuart, a leading executive search firm and is evaluating external candidates. While we are moving with urgency we are taking a disciplined and thorough approach to ensure we identify the right leader with the experience and capabilities to guide Teleflex in the future. At the same time, it is critical that we maintain momentum across our strategic priorities during this transition period.

By way of background, I have had the privilege of serving on Teleflex's Board since 2009, and I bring more than 3 decades of experience in the medical device and health care industry. As interim CEO, my immediate focus is on execution, advancing the closing of our 2 strategic divestitures, consistently delivering on our financial commitments, and ensuring continuity across the organization. I am working closely with our leadership team to keep the business moving forward, aligned with our strategic objectives. With that context, let me expand on the key elements of our strategy.

In December year, we signed definitive agreements to sell the acute care, interventional urology and OEM businesses to 2 separate buyers. The strategic divestitures will result in total cash proceeds of $2.03 billion, with net after-tax proceeds of approximately $1.8 billion. As an update, we are working through the regulatory and other conditions to closing and continue to expect the sales to close in the second half of 2026. To be clear, our value creation strategy is unchanged, and we intend to use these net proceeds to return significant capital to shareholders through our previously announced share repurchase authorization of up to $1 billion while also reducing debt to enhance our financial flexibility and support future growth and value creation. These planned actions signal our commitment to disciplined capital allocation and shareholder returns.

We will continue to evaluate additional opportunities to return capital to shareholders as appropriate, consistent with our focus on long-term value creation. The creation of Teleflex RemainCo, which represents our continuing operations, results in a more focused and optimized portfolio centered on highly complementary businesses. Vascular, which now includes the emergency medicine portfolio, interventional, which no longer includes the intra-aortic balloon pump portfolio and Surgical. We are positioning Teleflex as a medical technologies leader with increased flexibility to invest in innovation and compete in these priority markets. Specifically, product innovation will be a strategic priority for investment going forward, we expect R&D expense for RemainCo to represent approximately 8% of sales compared to approximately 5% of revenue that Teleflex spent historically.

A couple of comments regarding our 2026 adjusted EPS guidance. For 2026, our adjusted EPS guidance is in the range of $6.25 to $6.55. However, it is important to note that there are a number of assumptions included in this guidance will have significant impacts on our EPS as we move through 2026 and into 2027. First, this guidance range includes the full year negative impact of stranded costs related to our strategic divestitures which we estimate to be $90 million. Stranded costs are necessary to support both continuing and discontinued operations for a transitionary period of time.

Second, this guidance range does not include the positive impact of the transition services and manufacturing services agreements that will come into effect upon the closing of the strategic divestitures. On an annualized basis, we expected TS and MS agreements to fully offset the aforementioned standard costs. Furthermore, we are taking action on reducing expenses when the TS and MS agreements roll off in the future. and have announced an initial restructuring plan to mitigate approximately [ $50 million ] of costs to rightsize the organization post divestitures. Finally, our 2026 adjusted EPS guidance does not include the anticipated positive impact from our announced plans to repurchase $1 billion of our common stock and repayment of debt with the remaining proceeds from the strategic divestitures, both of which we intend to execute following the closings of the transactions.

We anticipate these actions will result in a meaningfully lower share count and significantly reduced interest expense. Although we have not included the benefits of these actions on our 2026 adjusted EPS guidance, we continue to anticipate closing of the strategic divestitures in the second half of 2026. Taken together, we expect these factors will contribute to significantly higher adjusted EPS in 2027 and beyond.

Now moving to the agenda for the remainder of this morning's call. First, we will discuss our continuing operations results, and then conclude with our financial guidance for 2026. Before I begin, please note that we have reclassified the assets associated with our pending strategic divestitures of acute care, interventional urology and OEM businesses as discontinued operations to reflect the strategy to separate the company provide a clearer view of the ongoing performance of RemainCo and in accordance with accounting guidance requirements.

Given that Telflex is entering a new phase with a streamlined portfolio focused on the acute care setting, I will limit my comments to the continuing operations for the second half of 2025, inclusive of the acquisition of Biotronic Vascular Intervention business. All growth rates that I referred to are on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Pro forma adjusted constant currency growth excludes a $14 million impact of foreign exchange, the Italian payback measure in 2025 of $9 million and the impact of approximately $14 million in RemainCo product revenue that was discontinued at the end of 2025 due to a strategic realignment but includes revenue generated by the acquired Vascular Intervention business for the prior year period.

Now let's move to the second half 2025 continuing operations revenue by global product category. Commentary on global product category growth from continuing operations for the second half of 2025 will also be on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Starting with Vascular Revenue increased 2.4% year-over-year to $472.7 million was primarily driven by growth in our central access, hemostatic and [ atomization ] products offset by a tough comparison from the prior year period, in part due to military surge orders that did not repeat in 2025.

Moving to Interventional. Revenue was $427.5 million, an increase of 8.1%, the strong performance for the second half was driven by a broad interventional portfolio. For the second half of 2025, reported Vascular Intervention revenues were $202 million. In our Surgical business, revenue was $219.3 million an increase of 3.2%, reflecting impact of volume-based procurement in China. Underlying trends in our core surgical franchise continued to be solid with strong double-digit growth from the majority of our franchises. This completes my comments on the second half revenue performance.

Now I would like to turn the call over to John for a more detailed review of our financial results. John?

Thanks, Stu, and good morning. All results that I speak to will be on a continuing operations basis for 2025. Due to the reclassification to discompete operations, historic continuing operations reflect the impact of stranded costs in all periods presented. Given Stu's previous discussion of revenue, I'll begin with margins. For 2025, adjusted gross margin was 63.7%, the 200 basis point decrease year-over-year was primarily due to the adverse impact of tariffs. The addition of the Vascular Intervention acquisition, which has a slightly lower gross margin than the corporate average, and, to a lesser extent, increased logistics and distribution costs and foreign exchange.

Full year adjusted operating margin was 22.7%, the 230 basis point decrease reflected the year-over-year gross margin pressure, higher operating expenses associated with the acquisition of the Vascular Intervention business and a negative impact of foreign exchange rates. Adjusted net interest expense totaled $93.6 million for 2025 as compared to $77.4 million in the prior year. The year-over-year increase is primarily due to the borrowings used to finance the Vascular Intervention acquisition. For 2025, our adjusted tax rate was 12.6% compared to 13.4% in the prior year. The year-over-year decrease is primarily due to the beneficial tax provisions included in the recently passed 1 big beautiful Bill Act, including the ability to deduct U.S.-based R&D expenses.

At the bottom line, 2025 adjusted earnings per share was $6.98, representing an 8.7% increase year-over-year. The increase is primarily due to higher revenue and adjusted operating income, including the impact of the Vascular Intervention acquisition, a lower tax rate and share count partially offset by negative impact of interest expense and foreign exchange. At the end of the fourth quarter, our cash, cash equivalents and restricted cash equivalents balance was $402.7 million as compared to $285.3 million as of year-end 2024.

Turning to our guidance framework for 2026. As we have indicated, 2026 results include a number of transient factors related to our strategic divestitures that will impact our near-term results, which we expect will be mitigated with the close of both transactions. Therefore, we anticipate 2027 will be more reflective of the underlying business going forward, ultimately building a clearer financial profile with significant improvements in margins, interest expense and adjusted earnings per share.

With that context, I'll go over items that will impact our 2026 results. First, we will incur approximately $90 million of stranded costs associated with the classification to discontinue operations throughout 2026. Once the strategic divestitures close, which is still expected to be in the second half of 2026, transition service and manufacturing service agreements are estimated to fully offset the stranded cost on an annualized basis. Of note, until the divestitures close, cash generated by the discontinued operations will accrue to RemainCo, thereby reducing the economic impact on the company from the stranded cost until fully offset by the transition service and manufacturing service agreements. Accordingly, our initial 2026 guidance reflects the fully burdened cost structure for RemainCo inclusive of approximately $90 million in stranded costs, but does not include any positive impacts from the transition service and manufacturing service offsets.

Second, the exact timing of the closings of the strategic divestitures will pace our ability to deploy capital during 2026. As a reminder, we expect to receive net proceeds of approximately $1.8 billion after tax from the divestitures. We remain committed to returning significant capital to shareholders through our previously announced $1 billion share repurchase authorization and our intention to repay debt with the remaining proceeds from the strategic divestitures. We continue to expect to close the divestitures in the second half of 2026. As we receive these proceeds, we will execute on our capital deployment initiatives with continued focus on maximizing value.

As we look forward to 2027 and beyond, we anticipate these capital deployment actions in combination with the impacts of the transition service arrangements and manufacturing service arrangements and our efforts to further mitigate stranded costs and rightsize the organization will result in a significant increase in our adjusted EPS.

Moving to a review of our 2026 guidance. Please note that our 2026 guidance is provided on a continuing operation basis and excludes the acute care, Interventional Urology and OEM businesses. For year-over-year comparison purposes, 2026 guidance is based on a pro forma adjusted constant currency growth that excludes the impact of foreign exchange and the Italian payback measure in 2025 of $14 million and $9 million, respectively, and the impact of approximately $14 million in product revenue that was discontinued at the end of 2025 due to a strategic realignment. Pro forma adjusted constant currency growth guidance for 2026 includes Vascular Intervention revenue for the first half of 2025. We expect pro forma adjusted constant currency revenue growth for 2026 to be in the range of 4.5% to 5.5%.

To put the 2026 growth outlook into context, continuing operations delivered 4.7% pro forma adjusted constant currency revenue growth in the second half of 2025. This performance establishes a solid foundation for our future mid-single-digit revenue growth profile, and we remain confident in our ability to achieve this goal as we move forward.

Turning to adjusted earnings per share. We expect the range of $6.25 to $6.55 in 2026. Again, this reflects a set of assumptions and excludes a number of factors as already discussed. Additionally, for modeling purposes, you should consider the following: we expect 2026 adjusted operating margin to be approximately 19%, which reflects the full impact of approximately $90 million in stranded costs associated with the separation activities and no offsetting benefit from transition service and manufacturing service agreements during 2026. In addition, I would also note that our 2026 operating margin is inclusive of R&D investment of approximately 8% of sales.

Once the strategic divestitures close, we expect at least $90 million on an annualized basis from the recognition of transition service and manufacturing service agreements to fully offset stranded costs, which will be netted in our expenses. Of note, when taking into account the positive impact of transition service arrangements and manufacturing service arrangements in terms of reducing RemainCo's operating expense profile, we estimate that our underlying steady-state adjusted operating margin will be approximately 23%, which is 400 bps above our fully burdened adjusted operating margin guidance for 2026. As a first step in the process to mitigate the approximately $90 million in stranded costs, restructuring, as disclosed in today's press release has been approved by our Board to eliminate a portion of these stranded costs, streamline global operations and improve our long-term cost structure, primarily through workforce reductions and capital asset rationalization, reducing costs and increasing operational efficiency.

These actions are expected to be substantially completed by mid-2028. We expect the restructuring to result in approximately [ $50 million ] in annual pretax savings. Looking forward, we see opportunities over the next several years to improve adjusted operating margin through leverage from revenue growth and other cost-saving initiatives above our steady-state margin profile of approximately 23%, moving to assumptions below the line. Net interest expense is expected to approximate $105 million for the full year 2026. Our estimate reflects a refinancing of our $500 million [indiscernible] senior notes which are due in November 2027 and does not assume any debt paydown associated with the after-tax proceeds from the strategic divestitures.

Finally, we are assuming a 2026 tax rate of approximately 13.5%. For shares outstanding, we are not assuming any share repurchases in 2026 guidance, implying a share count largely consistent with 2025. Nonetheless, we are committed to executing our $1 billion share repurchase program upon the closing of each of the strategic divestitures and we'll provide updates to our guidance throughout the year. That concludes my prepared remarks.

I would now like to turn it back to Stuart for closing commentary.

Thanks, John. In closing, I will highlight our 3 key takeaways from the fourth quarter. First, Teleflex is in the midst of a transformation that optimizes our portfolio, create some more focused medical technologies leader and positions our company for meaningful value creation opportunities going forward, is energizing to see how focused and committed our team has been to delivering for customers, patients and shareholders. Second, RemainCo delivered strong pro forma adjusted constant currency growth of 4.7% year-over-year in the second half of 2025. This growth performance over the second half of 2025, which reflects the period in which we have owned the Vascular Intervention business came with our 2026 pro forma constant currency growth guidance of 4.5% to 5.5% are in line with our mid-single-digit growth profile and represent a strong reflection of the stable growth potential of our go-forward business.

Third, we continue to expect our 2 strategic divestitures and to close in the second half of 2026. We remain committed to using the estimated $1.8 billion in after-tax proceeds from the transactions to return significant capital to shareholders for a $1 billion share repurchase program while also reducing debt to enhance our financial flexibility and support future growth and value creation. The closing of the transactions will also enable us to recognize TS and MS fees, which are expected to be at least $90 million and fully offset the stranded costs on an annualized basis. We are also actively engaged to reduce our cost with today's announced restructuring that is targeting approximately $50 million in savings.

With a more streamlined portfolio and clear strategic priorities, we will be well positioned to drive durable performance and long-term value for shareholders. We expect our financial performance to improve through 2026 and more fully reap the benefits of our efforts in 2027 and beyond with meaningful increases in adjusted earnings per share. That concludes my prepared remarks.

Now I would like to turn the call back to the operator for Q&A.

[Operator Instructions] Looks like our first question today comes from the line of Mike Matson with Needham & Company.

Yes. So just in terms of the use of proceeds from the divestitures, you have the $1 billion share repurchase authorization. And I think I heard you guys saying that you are planning to fully utilize that. Maybe you could just comment on what that mix of the $1.8 billion is going to look like between share repurchases and debt repayment?

Well, yes, you got -- started already. So it's $1 billion for the share repurchase. And that other $800 million, we are committed to paying down debt. So it will likely be the deferred draw revolver we put in place for the Bison acquisition of about $700 million, and then we'll put the other $100 million towards our revolver.

Okay. Got it. And then just in terms of the restructuring savings, the $48 million to $52 million. I believe the press release said that you do expect to see some of that savings in '26, was any of that baked into the $625 to $6.55 EPS guidance range?

It is. So -- and there's some nuance. There was a -- we also announced another restructuring in Q4 for the Biotronic acquisition, and that's going to go towards additional savings post 2026. So just coincidentally, there's about $50 million already line of sight on post 2026 as well. So yes, the current restructuring has some savings in '26, that's already based to the guidance. but we also have line of sight on $50 million post 2026 between the 2 restructurings.

Our next question comes from the line of Jayson Bedford with Raymond James.

And I appreciate there's a lot of moving parts, and thank you for all the detail here. I guess what I wanted to ask was I appreciate the pro forma [ 4.5 or 4.7 ] growth in the second half. Do you either have a first half number or a full year number? Just trying to think apples-to-apples here?

Jason, I think we think the 4.7 is the most representative of the growth profile, where we own Biotronic. I think this is an opportunity for you to model off that 4.7 with our -- along with our guidance. for the full year. We won't be getting into organic growth. We've put everything into the pro forma number -- and so I think that's your starting point, the 4.7, think about it that way as you launch yourself into 2026.

Okay. Okay. And then just on Surgical, you mentioned double-digit growth in most franchises ex the VBP impact. What's driving the double-digit growth? And how much of the VBP impact is left for '26?

Yes, Jason, it's Larry. Relative to Surgical, we've had some strength really across the portfolio, 1 standout has been our instrument portfolio, which has seen strength now for many quarters. We've got a refreshed instrument line there. And keep in mind, this instrument portfolio is really sort of aimed at ear, nose and throat procedures. That's been a really solid one. Of course, ligation continues to be a good driver of growth with the exception of China, where the VBP has been hitting. So that's kind of the key drivers within surgical.

Yes. And I would say, too, as we get into 2026, we have an automatic appliers that continue to show some nice growth, and there's some real opportunity for that growth in EMEA.

And our next question comes from the line of Bradley Bowers with [indiscernible].

First one, just on costs. We're getting the full pro forma sales profile. I just wanted to hear where we are on the pro forma cost profile, if there are any stranded costs to speak to?

So yes, as we've disclosed and discussed, there's a $90 million worth of stranded costs sitting in our P&L, right? So that's items you can't directly attribute to the disposition, but nonetheless you need to run the HoldCo company. So while it sits in disc ops, we're still managing that business. We still have the opportunity to use those cash flows and so that's some of the overhead burden that exists and the accounting, unfortunately, doesn't allow you to allocate it. It makes keep it into continuing operations. And as we said, we're looking for opportunities to fully mitigate that in the beginning with the TSA and MSA arrangements and then finally, through restructuring programs, it's our intention to go after that entire $90 million.

And Bradley, it's Larry. I would just add that as you look at the 2025 adjusted income statement that we have provided that also is inclusive of the stranded cost for the continuing operations. So that's already in there as well.

Awesome. That's helpful. And then just one more kind of on the medium term of the business. It sounds like use of cash repo and debt paydown, but legacy Teleflex was acquisitive. How much is tuck-in M&A still on the table? And how much is that a driver of immediate...

Yes. So yes, there may be some go to rec if there's something that looks like it's a great interest to us. We'll certainly consider pursuing it, but I think for 2026 right now, the business is integrating the rest of the Biotronic acquisition and getting the separation complete and the sale is complete. So we're not expecting any significant M&Ain 2026.

And our next question comes from the line of Shagun Singh with RBC Capital Markets.

So obviously, 2026 as a transition year. But can you give us a look into what the company might look like in 2017 and beyond? Maybe touch on strategic priorities, how we should think about sales growth, margin profile and where the company could go beyond that? And then my second question is just on the CEO search. Who is the right leader for this role? And what qualities or experience are you looking at?

I'll start with -- I'll start with your first question and Shagun. We're not putting out a long-range plan right now. So I'm not going to give you growth profiles for '27 or what things may look like. I think when you're thinking about '27 though, and you think about the mid-single-digit growth, you look at '27 with our ability to take out the stranded costs, our ability to pay down a significant amount of debt and then buy back shares. I think you'll find, one, a really -- with your own math, a really nice underlying margin. And then I think with the share buyback, you're going to -- you should find yourself coming up with a significant uplift in the EPS. But I'll let you do that math, but I do not have guidance otherwise for 2027.

Yes, this is Steve. On the CEO search, as we've ever previously reported, we're working with Spencer Stewart on the search. We're really focused on people who have demonstrated experience, midsized, high-growth organization, operating on a global basis, really focused on high acuity hospital settings.

And our next question comes from the line of Ravi Misra with Truist Securities.

So just a couple of questions. Given the recent rulings on tariffs, can you kind of help us think about how that's contemplated in your outlook for committing operations? And then just on this kind of cost reduction program that you've implemented and mitigation that's coming in, in the following year, help us think about maybe how quickly the pace of that could maybe come in. We're -- I think kind of mid-20s was our expectations for kind of RemainCo operating margin a year ago. It sounds like low 20s is the is the kind of new base that we should be thinking about? Help us think about maybe what gets us back to that mid-20s and above range.

Yes. I think operating leverage, so if you start -- I won't tell you guys how to do your models, but if you start modeling out '27 with mid-single-digit growth and you start and you take out the stranded costs, the mitigation for the stranded cost, I would think you're quickly going to find yourself back in that mid-20s is what I would suggest. But I'll let you decide how you model that. As for tariffs, our plan does contemplate the tariffs that were expected last week before the Supreme Court's decision. And now there's certainly some significant uncertainty whether these additional tariffs will come in 10% tariff or 15% tariff wherever it may land.

We were -- we did consider that we have additional tariffs of about $18 million this year on top of the prior year. So somewhere in the neighborhood of $35 million. What I would tell you is there would be some obvious savings if the Supreme Court ruling was did, and that's where it stood. Of course, those savings get much less if you're in the 10% to 15% realm. And then the question becomes this 150 days, is that the end of it -- and as the administration are going to find another opportunity to push tariffs. So I think with all the uncertainty, we've left our plan where it's at before the Supreme Court's decision. So there's likely some upside. But again, I can't tell you that for sure.

Keep in mind that when we pay tariffs, they get capitalized in inventory. So a lot of what we -- in our plan is already sitting on our balance sheet and will come to find its way into the P&L. So despite tariffs ending that would happen. And typically, you're looking at least 2 quarters before you start seeing some relief. And so I think you just -- if you're trying to think about what that opportunity might be, keep that in mind.

And as far as refunds, that's anybody's guess right now. I think many think it's going to be very, very difficult to refund -- get a refund from the federal government. I'm sure you've seen several organizations have already filed lawsuits requesting refunds. So it's -- unfortunately, we're back to this uncertainty, but that's what's contemplated in our plan right now is the full year of tariffs, and we'll continue to update everyone as we know more as the days progress.

And our next question comes from the line of Matthew O'Brien with Piper Sandler.

Just to be -- John, just to be more direct on -- I know you don't want to talk about '27 much, but as I do the math on the stranded costs, the potential benefits from from the debt paydown and then the share repurchases as well for this year. And I know it's all pro forma, and you're not doing it all this year, but I'm getting more like almost $9.5 on the $10 in earnings this year. Is that a fair way to think about what the pro forma '26 number could look like, given that you're excluding those benefits right now? And then I do have a follow-up.

Yes. I don't want to -- I can't confirm your model. I think there's some opportunity in there, too, and there is a -- the reality is we're also -- so we're going to have some of the restructuring benefits happening at the same time. So the $90 million gets more than offset. So you've got all the pieces. There's the restructuring, there's the covering the TSA, MSA cost. If you're modeling '27, I assume you should be able to come up with some leverage if you're thinking mid-single-digit growth. So you have that opportunity. And I can't speak for how you're coming up with your shares. I mean that's going to be a debate on share price to be sure. But I would think you'd find yourself closer in that -- in a $10 a warrant range is what I would think.

Yes. And Matt, it's Larry. I would just again reiterate we absolutely intend to deploy the proceeds from the transactions for that $1 billion share repurchase authorization that's in place, and the remaining $800 million is debt.

Yes. Significant interest savings you should be modeling for 2027. Yes.

Our next question comes from the line of Larry Biegelsen with Wells Fargo. Are you there? Might be muted going once, going twice -- all right. Let's go on to the next question, and that is from Michael Polark with Wolf Research.

I didn't hear a ton about Biotronic integration. Can we just get an update on how that's going, Salesforce retention, cross-selling U.S. versus Europe, what have been the highlights so far, any challenges that have popped up?

Yes, I think it's going well. The sales force integration is taking place in the very back half of the year and a little bit into the first half of Q1. We did -- if you go back to Q4, so we did announce a restructuring related to the VI acquisition. That has kicked off well. We've been able to retain the talent we expected to retain. So no big regrettable losses from our standpoint. And I think it's going well, the bags have been combined for the sales force, and we think there's some significant opportunity for revenue synergies moving forward.

Yes, this is Steve. I would just add. I was at the -- our Asia and North America sales training meetings in the last couple of weeks. And I would say these organizations are fully integrated and are working together, putting good marketing plans in place. So I feel really good about the integration of the sales forces and the opportunities that lie in front of them.

As my follow-up, I want to ask about R&D as a general concept, 8% as a portion of revenue for RemainCo. Can you just remind us, is that step-up versus historical Teleflex entirely explained about Biotronic and some of the pipeline there? Or does RemainCo expect to increase investment in surgical existing interventional and vascular?

So what I would tell you is, yes, Biotronic came with a higher amount of R&D. So we were, as total Teleflex now with the discontinued business, we're about 5%. There are much bigger investment opportunities in the interventional space. And so there's a -- in addition to what Biotronic was spending, we have made some decisions to put in additional R&D resources for the interventional space. And then I think second to that would be in the vascular space, we've increased our R&D as well. Surgical, I would say, to a lesser extent.

Our next question comes from the line of Travis Steed with BofA Securities.

I guess looking ahead a little bit, obviously, the TSAs are going to offset a lot of the onetime stuff for probably, what, 2 years. But once those go away, do you have enough juice in the bag, I guess, to continue to expand margins once the TSAs go away in a couple of years?

So right. So when the TSAs go away, as the TSAs go away, I should say, and there's going to be a little bit of overlap here with some of the restructurings. And while we're getting TSA revenue, in fact, it may give us a little bit of a headwind as we get into later years because we'll have a little bit of both happening at the same time. But our goal is to completely mitigate and offset those stranded costs. But keep in mind, the op margin profile with the growth profile should also contribute to some significant leverage over time to continue to move up that op margin on its own.

We'll continue to look at cost-saving initiatives. As an organization, we've been very lean on the OpEx side, and we'll continue to be looking for those opportunities to be sure. But I think about once you kind of cover those costs, your real opportunity is that P&L leverage. As you continue to grow, you keep a big base of that OpEx the same and i.e., you end up with a much better op margin. And that's kind of our long-term thinking, if you will. Again, we don't have a long-range plan in place yet, but I think that's the real opportunity.

Okay. So it sounds like 2027, you kind of reset the base. And then from there, it sounds like you probably have an ability to continue to grow earnings and get EPS leverage going forward, kind of earnings can grow faster than revenue and margins continue to expand '27 plus and beyond.

That's right. And I think that -- that -- I'm sorry, it's not just resetting the base in '27. Some of that opportunity for leverage exists in '27 as well. I'm sorry, '26 as well and '27.

And we have a follow-up question from Larry Biegelsen.

Sorry about that dropped a couple of times. So hopefully, I don't think this was asked yet. Just on revenue for 2026, you grew -- RemainCo 4.7% in the second half of '25. The guidance calls for similar growth in '26. So what's giving you the confidence to start the year there given that you guys had some missteps recently and you don't have a permitted CEO. Yes, that's my first question. Maybe just a second, John, just any phasing considerations for '26 for revenue and margins.

Sure, sure. And Larry can spend some time with you later on some of the cadence, but there will be a step-up over the 4 quarters from the beginning of the year with the recent integration and the new combining of the bag. There's also some step-up as you move through the year. VBP impacts in 2025 were more pronounced in the second half of 2025. So 2 things as I think about the confidence in that trajectory are those. I think there's a real opportunity for that sales synergy to take place. And again, the comps get a little easier in the second half because of the VBP. We'll still have some VBP impacts in 2026, likely in our Surgical business, but we think the lion's share of VBP is behind us now.

Great. Thank you for those follow-ups, Larry. And that is all the questions we have today. So I will now turn the call back over to Lawrence Kirsch for closing remarks. Laurence?

Thank you, Greg, and thank you to everyone that joined us on the call today. This concludes the Teleflex Inc. Year-end 2025 Earnings Conference Call.

You may now disconnect your lines. Thanks, everyone.

Great. Thanks for joining us here for our next session. I'm Matt Taylor, the UBS -- sorry, Jefferies, Medical Supplies and Devices analyst. And I'm joined here by members of the Teleflex leadership team, including Liam Kelly, the CEO; and Larry Keusch, who directs IR and Strategy for Teleflex.

So these kind of meetings, I'd like to start a little bit high level. So maybe you could talk about Teleflex's positioning in the health care market. And I also want to go through some of your portfolio management because you're making some big decisions here between RemainCo and NewCo and made some new disclosures about maybe leaning more towards the sale of NewCo. So maybe talk about why you're doing that and give us an update on where that is.

Yes, absolutely. So just to take a step back, why did we decide to separate the company? So the Board and management believed that RemainCo and NewCo had 2 different growth profiles, 2 different opportunities for investment, 2 different processes for capital allocation. And as such, in our Q4 earnings call, we announced the separation of Teleflex into 2 companies, NewCo and RemainCo. And we did that in our Q4 earnings call in February.

A lot has happened since February. And we knew at the time that by saying that we were going to separate through a spin public company offering, we anticipated we would get inbound interest in the assets. What we didn't anticipate was the amount of inbound interest we were going to get in the assets. So we got a lot of inbound interest. And I think candidly, it speaks to the quality of the assets that were put up for the separation through a spin.

So on the Q2 earnings call, we again updated the investment community to advise them that we had indeed had a lot of inbound interest. At that stage, we had held some high-level management meetings with some of the interested parties, and we advised that we were going to go on a parallel path, a separation through a spin and a separation through a sale. Between the Q2 earnings call and our Q3 earnings call a couple of weeks ago, we had done a herculean amount of work in engaging with these interested parties. So on the Q3 earnings call, we announced that we -- given where the momentum we had built in that time and given where we were in the process that we were indeed prioritizing a sale of the company.

We had -- we are -- and we also announced that we were at the advanced stages of the due diligence. We still see a spin as an opportunity to create shareholder value in the event that is required. And of course, our goal is always to maximize shareholder value. We've run all the analysis on the tax breakage. We've run all the analysis on what this company would be worth on the public markets, and we believe that a separation through a sale will be in the best interest of our shareholders. The Board and management continue to engage with these parties, and we will keep the investment community updated as we make progress through this.

Regarding the timing, we said the separation through a spin would be halfway through 2026. Obviously, if you did consummate a sale, given where we are in the process, you'd envision that, that would be sooner than that time frame. So we feel comfortable where we're at. We think there's a -- we have a lot of work done. We've worked incredibly hard to get to where we are right now, and we believe this is in the best interest of our shareholders.

So maybe let's move on to talking about more on the RemainCo side and the assets that you have. Talk about why they belong together and now the addition of BIOTRONIK. What does that add to the portfolio?

Yes. Well, first of all, it will really simplify our business. I'll just give you a couple of examples. So in Teleflex today, we have 7 business units, and we have 19 manufacturing sites that we run and manage every single day. In RemainCo, we will have 3 global business units, and we will have 7 manufacturing sites that we will be managing. So it simplifies our business.

Strategically, if you think about a patient flow through the hospital and you think about how a patient enters the hospital, they normally are brought -- they either walk or brought by an ambulance into the emergency room. So within our vascular and emergency medicine business, we will have a full suite of emergency medicine products for that patient. And normally, the patient will get one of our EZ-IO products. If they're bleeding, then one of our hemostatic products will get used, they'll get into the emergency room. Then they'll get triaged within the emergency room where potentially one of our PICCs will get used on the patient.

And then they'll go to -- normally, they go to -- they either get triaged out or they go to 3 areas in the hospital. They'll either go to the intensive care unit where our vascular portfolio is available for that patient. They'll go to a surgical suite where our surgical portfolio is available for that patient or they'll go to the cath lab where our interventional portfolio is waiting for that patient. So strategically, we're positioning Teleflex as an acute care emergent non-postponable procedure company firmly wedded within the hospital setting.

If we look at the performance of RemainCo through the first 9 months of this year. And if you exclude the impact of volume-based procurement and you exclude BIOTRONIK, and the reason I'm excluding the volume-based procurement is because it's transitory. It will be pretty much washed through by 2025. And therefore, in 2026, we won't have a secondary impact of that. So if you look at the performance through the first 9 months of the year, the business is growing at approximately 5%, firmly rooted in the mid-single digits where we want to be able to grow consistently with this business.

And then if you look at BIOTRONIK coming into that mix and you look at BIOTRONIK, we've owned that now for 4 months. So we've had 1 quarter of results took under our belt. And as a reported basis, that business grew approximately 7% in the first year of ownership. I'll spend a few minutes on BIOTRONIK as part of your question as to how that fits together within Teleflex. And if anybody didn't have the opportunity to listen to the webcast last Friday, I would encourage you to go and listen to it. We had some docs talking and we were outlining why this business fits so well into Teleflex.

And again, taking a step back and looking at this strategically, we are going to be focused on complex PCI. There's a niche within this market where we can bring a level of expertise and we can carve out a space for ourselves there without having to compete with the bigger players who are really focused on general PCI and other areas of the cath lab. If you look at the BIOTRONIK business, VI business geographically, 50% of the business is in Europe, 25% roughly in the States and 25% in Asia. If you look at our business, it's the polar opposite concentrated in the United States. So we're putting these sales forces together, and we will have a much larger sales force in both Europe, Asia and in the United States selling this combined bag of products. And this combined bag of products fits very well together, specifically in complex PCI.

Our sales organization globally is every day in the cath lab with complex PCI, with our access catheters, the GuideLiner, the TrapLiner, the Turnpike. These are used to gain access to the tortuous arteries. And the BIOTRONIK VI drug-eluting stent is the most malleable stent when you want to put it in, and it's also tapered. So when you get to these tortuous arteries in complex PCI, it is the best stent and there's loads of clinical data to show on head-to-head comparisons, it is better than the comparable stents on the market.

And you add that to the other range of the portfolio, the balloons, and I think what the feedback we got immediately following the call was, oh, we were a bit surprised the pipeline is pretty robust for this company. And also the existing portfolio is much broader than we would have thought. This is not just a drug-eluting stent company. There's a lot more to this company that meets the eye.

So combining these 2 together, and the fact is that, especially in the United States, we can gain access to the cath lab for complex PCI, whereas it's more difficult for a smaller company like the BIOTRONIK VI business. So that will gain us access there. And that market is growing mid-single digits. So that's an attractive market. Their peripheral products will also bring us into faster-growing, higher single, low double-digit growing markets and give us an opportunity to grow into that space.

And then as we outlined on the call, we have the optionality of Free, and what is Freesolve? Freesolve is a scaffold that really falls into the trend today in interventional cardiology of leave nothing or leave less behind. And again, for a cohort of patients, and particularly those with longer lesions, STEMI patients, patients that are younger. So if I have a coronary event today, and I'm 59 years of age, the likelihood of me having another event before I'm 70 is very, very high. If you put a drug-eluting stent in, then you have burned a bridge for the future treatment of me. You can't put a stent on top of a stent. So you could use a balloon. There are balloons out there in the marketplace today. They also have their limitations. And I like the optionality of Freesolve.

So what it is, it's a scaffold. It's made of magnesium, a drug-eluting scaffold that operates like a stent with the big caveat. It gets absorbed into the body after 12 months. There have been previous technologies that tried to do this, but they didn't absorb for 4 years. They were polymer-based. So when you try to position them in the artery and you try to extend them, they cracked. And over time, they cracked and pieces were left, whereas this product, we believe, has been largely derisked by the first study, BIOMAG-I, which showed it was opened up the archery and was fully absorbed after 12 months. And now we're doing BIOMAG-II in Europe. That study should have a readout at end of 2027, and we're kicking off BIOMAG-III for the United States because we like the optionality of this product in the future. So there's a lot there, Matt, but I'll pause.

Great. No, I actually wanted to double-click on BIOTRONIK after you made some of those statements. And I think before you've really characterized this as likely growing kind of at the upper end of mid-single digits for that piece of the portfolio. But with the geographic synergies, some of the portfolio synergies, why couldn't that part of the business grow faster?

Well, I think it has the potential to grow faster as we bring in new technologies to the market. One thing that we are focused on with RemainCo, and if you think about RemainCo, good solid mid-single-digit growth, gross margins better than what Teleflex has today, operating margins similar because we're going to invest more in R&D. Our goal is today, Teleflex spends around 5% in R&D. For RemainCo, we're actually going to spend more than that because -- and in particular, in the interventional space because that's an opportunity to bring new technologies to the market. So in time, I think the interventional portfolio will be able to grow at that higher level.

And even in that -- firmly in that mid-single-digit range, our thought is that interventional will grow at the upper end and even beyond that. Surgical will grow in that area and Vascular will be a little bit on the lower side, especially in the earlier couple of years as we build momentum. So there is a potential for the interventional portfolio to continue to aggregate that growth with new product introductions and new technologies coming to the market and expanding the market, as you rightly said. There's opportunities for go-direct in different geographies that will augment that as well. And we feel that the combination of our interventional business and the BIOTRONIK VI business will facilitate that.

And a couple of other follow-ups there. One is for Freesolve. You talked about some of the interplay with drug-coated balloons. I was wondering how you think the world might evolve in terms of clinical segmentation there between balloons and that kind of a stent solution?

So drug-coated balloons have been available in Europe for many years. And what you see in Europe is that while the pricing of drug-eluting stents has come down, their use in volume has remained stable to growing. So everything is used in combination as we're doing more procedures. And why is that? Because there's more diagnosis of the condition. The condition is also growing. It's becoming more prevalent because, unfortunately, as human beings -- well, fortunately, we're living longer. And unfortunately, we're not taking great care of ourselves as we live longer. So I think that you do see a higher prevalence and a higher diagnosis of the conditions, which keeping the market growing. And things are used in combination. Just because you use a drug-eluting balloon does not mean on one of the side arms that you're not going to put in a scaffold or a stent. So I think the products are used in combination.

And I think that as the clinicians outlined on that call, as you inflate the balloon, you are sometimes doing some damage on the walls of the arteries as well that you need to combat. So not everything -- there's no utopia. So there's -- in some patients, you'll use stents, in some you'll use balloons, in some you'll use scaffolds. And in some, you'll use a combination of all 3 in order to get to the right diagnosis. It depends on the length of the lesion. It depends on the calcification. It depends on the patient profile. But for sure, this market is going to continue to grow and expand in all areas with these technologies.

And I guess you mentioned the pipeline for BIOTRONIK outside of Freesolve. What are some of the other products that you're most excited about?

So there's a number of products that we're expanding in, in the balloon area and the coated balloons. There's also different lengths of stents in order to manage those larger lesions. And there are products that we cannot disclose and couldn't disclose on the call for competitive reasons that are in the pipeline and being worked on that we have a level of excitement about. And as we get closer, we'll give the investment community some additional knowledge and insight into those.

Got you. You touched on this, but could you talk a little bit more about the margin profile of RemainCo? You mentioned a little bit higher gross margin and R&D spending. And I guess with SG&A, where does that net out? And should we think about any stranded or standup costs in the different scenarios that you have?

Yes. So in our thought that the gross margin will be -- obviously, we expect it to be better than Teleflex, the op margin similar to Teleflex. There is some stranded costs already contemplated within that. There is also the additional investment into R&D contemplated within that. Now obviously, if we're able to consummate a sale, some of the stranded costs are offset by MSAs and in particular, TSAs transitory service agreements as you move forward. And those costs will then come out later in the pipeline.

So there is definitely an option for both gross and operating margin expansion even beyond the initial launch of Teleflex RemainCo because of that dynamic that's going to occur as you work through the process with the acquirer in the same way as it happened with our Respiratory business when we sold that. There was a -- 18 months where we had MSAs in place. So that should be somewhat of an offset to the stranded costs right out of the gate that we should see materialize in the future. And obviously, we'll be diligent in looking at RemainCo to make sure it's as efficient as humanly possible.

And maybe just touch on tariffs related to margins as well. I think you've had a $0.50 or so headwind now this year. Can you talk about how that plays into next year and what you're doing to help mitigate that?

Yes, absolutely. So we began the year with a $55 million impact on tariffs or $1.05 of a negative impact right out of the gate. That was at our Q4 earnings call. And then when we got to Q2, obviously, there had been some changes, the biggest change being in China. And you're correct. Now it reduced from $1.05 to around a $0.50 headwind on tariffs, $25 million to $26 million.

What changed was, as I said, the change -- biggest change was in China tariffs, but also we did a lot of work ourselves on bringing more of our product to be USMCA compliant. We began at the beginning of the year with around 50% of our portfolio that moves from Mexico to the United States being USMCA. Right now, we're around 70%. We're never going to get to 100%, I don't believe, but we can continue to improve on that, and we're still doing work on that. And hopefully, we'll have progress made there by the time we get to give guidance for the full year.

I think that we did move inventory into certain geographies ahead of tariffs. So for 2026, it's not a question of just taking the $26 million and multiplying it by 2. There will be some ancillary tariffs on top of that because of the timing of some of these tariffs. But we are working to offset them with USMCA, with pricing, with some other strategies around Nairobi. So we'll give more details when we get to give guidance in February on exactly what the tariff impact will be.

Got you. And before you also mentioned that you're going to be through a lot of the China VBP by the end of this year. Are there other categories that have not been addressed by that, that could be at risk in the future for pricing pressure?

Yes. Almost all of our portfolio in China has been through volume-based procurement. And you even saw it in the performance of China. The low point for China from a revenue growth was in Q1. It was still negative in Q2, but got a little bit better, got better in Q3, and will continue to get a little bit better in Q4. So specific to RemainCo, our Vascular business has been through. Our Surgical business has been through and our Interventional business has been through with the exception of balloon pumps because there is no competitor for balloon pumps. There's one just launching, but it will take them 5 to 10 years to get any type of volume before it would be viable to be part of volume-based procurement.

And what we've seen actually ourselves as we gain more experience with volume-based procurement, we've gotten better at capturing the volume through the process. And also some of the earlier VBPs that were done when they came back at the second time around, I think that there was a realization they might have gone a little bit too deep and it did hurt domestic companies. So we have seen and we haven't been through a second round yet, but the companies that have, they've seen their prices come up a little bit from the lows of the first round.

And then I guess, maybe just also thinking about the future for RemainCo. Can you talk about the capital allocation strategy as you -- as kind of the dust settles either way?

Yes, absolutely. So like I said, we're prioritizing a sale right now. And I guess the first question is what would we do with those proceeds. And as the dust settles, it would be our thought that we would pay down some debt. We'd have a balanced approach. We pay down some debt, but we would also return capital to shareholders through share repurchases.

As you move into 2026, we will be very focused on executing in 2026, depending on what multiple our stock is at. Right now, there's no better value than buying Teleflex in my mind where our multiple is at. I think that there's no way you could buy a company outside of Teleflex at our current multiple and get a better return than putting capital to work within Teleflex.

For 2026, we're going to be very, very focused on executing on our plan, ensuring we get that mid-single-digit solidified, ensuring we drive good solid earnings growth, integrating the BIOTRONIK VI business and proving out the hypothesis of why we're separating into 2 companies. I think that's really important. I think we're -- as I said earlier, we're going to invest more in R&D so that more of our growth is going to come from internal developments, and we'll augment that in the future with smaller tuck-ins. But it's very dependent on where our multiple is at, whether you'd even consider doing a tuck-in depending on where -- if you can give a better return for buying Teleflex stuff.

So you can see our capital deployment is going to be very balanced moving forward. And for 2026, we would be focused on, as I said, returning that capital to the shareholders if we were able to consummate a sale. And moving forward, you could see it being quite balanced between internal R&D and returning capital to shareholders with smaller tuck-ins out in the future.

And we just have a couple of minutes left. I'll ask maybe 2 more questions. One is, I think it might just be worth touching on, you mentioned the balloon pumps. Maybe just talk about what happened here in the last quarter and how that changed from your initial forecast? And I guess what that means for the future of NewCo?

Yes, absolutely. So what -- when we announced the balloon pump strategy on foot of the competitor issue. So a competitor in Q3 last year had an issue where they had a field corrective action on their product. At that time, the business annually is around $250 million globally, and we had about 1/3 market share, less than 1/3 in the United States, more than 1/3 in Asia Pacific. And at that stage, we continued to execute. We got approximately about $10 million of additional revenue in Q4 of 2024. And the business before that was growing good solid double digits because we were taking share anyway. We came into this year, a lot of big systems were converting to the pumps, doing full systems conversions.

Now we always anticipated in 2026 that it would slow because we had pulled forward replacements from '26 and '27. But what we saw in Q3 was it started to slow earlier than we had anticipated. So we thought we would do about $110 million this year, which wasn't an unreasonable assumption. And now we believe we'll do around $80 million. The bulk -- vast majority of the $30 million call down was in the United States.

And getting feedback from customers they're telling us they're -- number one, it's not a recall. It's not a Class I recall. It's a field advisory notice, which they don't believe that is compulsory for them to change their product. We've given them the mod information that shows that they should reconsider that, but that's -- and the second feedback from customers is they're capital constrained and they have other areas that they're spending their capital on instead of replacing their balloon pump. But I think we executed well. We took a lot of share. We've gone from about 30% share in the United States to 40%, 45% share in the United States. So that's good movement.

What does it mean for NewCo into next year? Any -- all the purchasers that we were talking to were aware of this dynamic. So there was nothing we told them on the Q3 earnings call that would have been a surprise to any of the interested parties. And what it means is that it's not really going to have an impact on 2026 because we had anticipated this. It just started a little bit sooner.

Great. I think we do have to end there. I think we're out of time, but thanks so much for your interest in Teleflex, and thanks for your time.

Thanks, Matt. Cheers.

Good morning, ladies and gentlemen, and welcome to the Teleflex Vascular Intervention Investor Meeting. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly. And now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development.

Good morning. Thank you for joining us. On today's call, we will discuss the Vascular Intervention business, which we acquired from BIOTRONIK on June 30 of this year. Slides to accompany this call are available on our website at teleflex.com.

In addition, a replay of today's event will be available on our website shortly after the meeting concludes. We are excited about the opportunity to grow the Teleflex Interventional business and wanted to take a deeper dive on the acquired Vascular Intervention business to help investors gain an appreciation for the portfolio and the opportunities for the future.

Participating on today's call from Teleflex are Liam Kelly, Chairman, President and Chief Executive Officer; Matt James, President of Teleflex Global Interventional Access; Thierry Glauser, Vice President of R&D for EMEA, Vascular and Interventional; and Chris Buller, MD, Dr. Buller is Medical Director, Clinical and Medical Affairs at Teleflex and a practicing interventional cardiologist.

In addition, we will have remarks from two prominent interventional cardiologists on the call. Dr. Kevin Croce, Interventional Cardiologist at Brigham and Women's Hospital and Assistant Professor of Medicine at Harvard Medical School; and Dr. Elliot Smith, Interventional Cardiologist at Barts Health NHS Trust and Royal Free London NHS Trust.

After the prepared remarks, we will open the call to Q&A. Please limit your questions to the Vascular Intervention business as we will not be discussing other Teleflex business units or updating financial guidance.

Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are in fact forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our filings with the SEC, including our Form 10-K, which can be accessed on our website.

Moving to today's agenda. We will begin with the drivers of growth in the interventional markets and an overview of the current Vascular Intervention product portfolio. We will then move to a discussion on the strategic direction for new product innovation to drive growth. Following the overview of the Vascular Intervention business, Dr. Buller will lead a discussion with Dr. Croce and Dr. Smith. We will end the prepared portion of the call with closing remarks from Liam. Following the prepared comments, Liam and the Teleflex team will take your questions. Of note, Dr. Buller is joining us from the hospital today prior to performing a number of interventional cases.

Now I'd like to turn the call over to Matt James to discuss the Vascular Intervention portfolio.

Thanks, Larry. As separate entities, Teleflex Interventional and the acquired Vascular Intervention business have been admired by interventionalists for their technology, device quality and innovative pipelines. With the acquisition of the Vascular Intervention business, we've created something that is greater than the sum of its parts, the merging of two complementary portfolios into one, underpinned by synergies in engineering, manufacturing, clinical expertise and commercial execution.

Teleflex now has the means to support our customers in both coronary and peripheral vascular domains with the devices that span access, procedural enablement and state-of-the-art therapeutics. By being able to offer a best-in-class sirolimus-eluting stent and in many geographies, a paclitaxel-based drug-coated balloon, we have a portfolio that is immediately relevant to all coronary and peripheral intervention list.

Simultaneously, we're pointing the way to the future through a robust clinical development program for the sirolimus-eluting metal scaffold freesolve resorbable metallic scaffold. The attempt is not to be just competitive is to be transformative.

Over the past several years, there have been observations of falling age-adjusted mortality from ischemic heart disease, suggesting that heart disease could potentially be going away. Far from it, falling age-adjusted mortality substantially reflects the widespread application of better treatments leading to better outcomes, not a decline in disease prevalence. Indeed, the ready availability of emergency coronary revascularization for acute heart attack in Western medical systems has been an important part of this story.

Patients undergoing primary percutaneous coronary intervention, or PCI, now overwhelmingly survive heart attack to enter a chronic disease phase. Yet that chronic condition often requires episodic revascularization for disease progression. As minimally invasive technology and techniques have improved, episodic revascularization is most often delivered by PCI, not bypass surgery.

The facts are that by 2050, global coronary heart disease incidence is projected to reach 67.3 million people an increase of 116%. Prevalence is estimated to reach 510 million people, a rise at 80%. A non-age adjusted mortality rates are projected to reach 60 million people up 62% from 2022. And for peripheral vascular disease, the worldwide incidence is projected to increase by 220% by 2050, reaching 360 million and prevalence is projected to surge to 21.7% in women and 14.8% in men.

Metabolic diseases are anticipated to be the primary drivers of the rising Peripheral Artery Disease, or PAD, burden. With diabetes playing a key role in an increasing peripheral vascular disease prevalence in severity. So for both coronary and peripheral vascular disease, we see a number of long-term trends that will continue to expand the amount of people impacted on a global basis.

Importantly, these underlying trends are expected to influence coronary heart disease and peripheral vascular disease by becoming more severe and complex, shaping and driving demand for advanced durable treatment options. With the combination of the legacy Teleflex Interventional platform and the acquisition of the Vascular Intervention business. Teleflex is now well positioned to compete effectively with an expanded portfolio to address complex disease, regulatory access, strong channel and commercial capacity to grow our market share globally.

Beyond today, we have a full pipeline of active product development projects to further drive our competitive position in the coronary and peripheral vascular markets. And we'll hear more about that in today's presentation later.

Historically, the focus in interventional cardiology has been on treating the disease vessel, solving the immediate clinical challenge. But that mindset is shifting. Today, clinicians are thinking more holistically. How do I treat this patient effectively now whilst preserving future options for interventions. This shift towards lifetime disease management is emerging from the podium as a critical driver of innovation and clinical value in this space.

Over the past 2 decades, the coronary interventions market has undergone tremendous transformation, particularly since the introduction of drug-eluting stents. Many of the technical barriers that once cause procedural failure such as lesion restenosis, crossing CTOs or Chronic Total Occlusions and managing heavy vascular calcification have largely been addressed individually. The focus now is on optimizing procedures with a toolkit to improve outcomes, not just completing the case.

While some may view the market as mature and undifferentiated, we see something different. We see a community of interventionalists who remain deeply committed to incremental improvements in long-term outcomes, and who are eager for partners that bring meaningful innovation to the table. In uniting Teleflex Interventional and the acquired Vascular Intervention business, we are demonstrating our commitment, investment and focus on the coronary and peripheral Vascular markets, committed to delivering interventionalists more technologies that support both their everyday patients and their complex patients, invested in shaping the future of intervention going forward, new technology, evidence and training, and we're focused on co-creating with physicians to empower choice for the interventional community the right therapy for every patient today and beyond. This is the market where Teleflex now operates, and we are uniquely positioned to compete effectively.

Teleflex has built a reputation for solving procedural complexity with category-defining tools like the GuideLiner and TrapLiner guide extension catheters, Turnpike and SuperCross microcatheters, these are products that change how complex procedures are performed. The acquired Vascular Intervention business, on the other hand, has focused on durable treatment, offering a comprehensive portfolio that positions the company to compete effectively, including drug-eluting stents, drug-coated balloons and Resorbable Magnesium Scaffold or RMS. This is a comprehensive suite that addresses the full spectrum of anatomical and individual patient needs.

As discussed, the interventional markets are large and growing. For Teleflex, the focus will be on geographical expansion and increased presence within our markets, strong execution and new product innovation. Given our current market share, we see opportunities to enhance our global position. Drug-eluting stent or DES are expected to remain a workhorse therapy for the next 10 years due to treatment guidelines that are supported by a wealth of excellent data.

Our company's Orsiro Mission drug-eluting stent is a differentiated and well-positioned DES on the market. with recognized technical performance. Teleflex has room to grow DES in several geographies with a larger commercial footprint over an expanded size matrix coming to market to cover larger vessel diameters and eventually longer lesions.

However, there is a recognized shift in coronary artery therapy towards the leave less or leave nothing behind philosophy. Today, around 25% of patients visiting cath labs have had previous coronary interventions. Physicians are increasingly thinking about lifetime management of disease as people live longer, meaning a higher likelihood of multiple interventions and are therefore less keen to leave a metallic stent in an artery, which may limit options for future interventions. This has resulted in increased usage of drug-coated balloons in the last 5 years, which is set to continue with positive clinical evidence as we've seen this past October at the TCT '25 medical meeting.

The Vascular Intervention portfolio includes the Pantera Lux DCB, which has a leading position in markets where it's available. It's our intention to invest in both coronary and peripheral, leave nothing or leave less behind devices to secure a leadership position in the emerging lifetime management segment. Resorbable Magnesium Scaffold or RMS technology Vascular Intervention is leading the market with Freesolve RMS. Freesolve RMS provides the acute benefits of a drug-eluting stent by providing a metallic scaffold to prop the artery open through the restenosis cascade which then uniformly is absorbed by the vessel within 12 months, resulting in an artery without a permanent implant.

As fruit of RMS evolves and lays the foundation of clinical research with partnering investigators, who will further explore treatment algorithms like a hybrid approach, where a lesion could benefit from a proximal scaffold with the distal vessel treated with DCB. It's truly an exciting time to lead the way for a lifetime management with a leave nothing or leave less behind product portfolio.

Furthermore, physicians are taking a more planned approach to durable definitive therapy. As new imaging techniques reveal more about specific lesion characteristics such as calcified, lipid-rich and/or fibrotic lesions. This is driving selective use and a combination of technologies.

Finally, Freesolve RMS overcomes limitations in shortcomings of polymer-based PLLA resorbable scaffold. We have rigorous and extensive clinical programs ongoing to build an evidence base and pursue regulatory approvals. But we're not just bringing products to market. We're building a high-value engagement program that elevates the conversation from devices to durable treatment strategies. Our expanded commercial teams are trained to add value, not just sell, and that is resonating with customers.

For example, the current acquired Vascular Intervention business has relatively limited market share in the United States. We see an opportunity to increase access to the cath lab in the U.S. through leverage from the legacy Teleflex Interventional business and strong sales force execution. The U.S. is a large market and methodical gains for Teleflex can be meaningful.

This combination of market-leading tools for complexity, a complete therapeutic portfolio and a customer-first commercial model gives us the confidence that we can compete effectively in this large market. Both Teleflex and Vascular Intervention have a shared history of providing excellent medical education programs, investing in customer education and benefiting from a strategic defocus of major competitors in the cath lab. Generating and sharing evidence to build trust and deepen collaboration as well as profiling breakthrough technologies in the scientific community to drive penetration.

The combined sales force significantly widens territory coverage in key markets. and opens new untapped markets in growing geographies. For example, in the large and important North American market, the sales team is expected to expand by approximately 50% under the combined business. This means we can serve more hospitals, more frequently. We have more relevance in GPO contract negotiations, and we can cross-sell the full interventional portfolio leveraging our market-leading position in complex PCI with an expanded share of each case, addressing more of the procedural journey.

Together, we now offer a complete portfolio for drug-eluting platforms, DES, RMS and DCB in Interventional Cardiology. This positions us to engage more deeply with clinicians, not just as suppliers with our strategic partners in patient care. I'll now turn the presentation over to Thierry Glauser for a discussion of our new product strategy. Thierry?

Thank you, Matt. I'm pleased to share the exciting progress and strategic direction of our Vascular Intervention pipeline, which will continue to demonstrate strength across both coronary Vascular Intervention and peripheral vascular Intervention. We remain committed to maintaining our commercially successful products while expanding our market share through more attractive and differentiated offerings.

In coronary Vascular Intervention, our flagship drug-eluting stent or remission is setting the benchmark for performance. We are working to expand its offering to larger diameters and initiating a clinical study focused on long length applications. addressing a critical unmet need in complex coronary cases.

Building on the long-term success of our Pantera Lux Paclitaxel DCB, we're enhancing the deliverability of its catheter platform while simultaneously advancing our DCB clinical program with [ dusted ] diabetes and Biohybrid, further reinforcing our innovation leadership. These two investigator-initiated randomized clinical trials are designed to demonstrate the performance of a leave nothing behind strategy for the DCB plus RMS bailout strategy compared to a DS only treatment for diabetic patients and long diffuse lesions, respectively. Both trials have been initiated with [ dusted ] diabetes enrolling patients and biohybrid expecting the first patient to be enrolled soon.

We are also actively working to transition our PK Papyrus Covered Coronary Stent from its current humanitarian device exemption status to a full premarket approval to help unlock broader commercial potential in the U.S. market. In peripheral Vascular Intervention, we have successfully launched the Passeo-18 Lux Paclitaxel DCB now available with balloon length up to 200 millimeters, offering physicians greater flexibility in treating longer lesions.

We anticipate entering new addressable markets with breakthrough technologies, such as the Akoya ultra high-pressure balloon designed for calcified or fibrous lesions and the [ explore crossing balloon ] intended to facilitate access through tight calcified anatomy and enable definitive treatment.

Looking ahead, our pipeline includes what we believe will be a best-in-class covered stent for the iliac artery, leveraging VI's hallmark deliverability and low profile. We're also investing in digital health solutions to support chronic limb-threatening ischemia patients, improving follow-up and ensuring the right patients receive the right care. A pillar of our long-term strategy is the development of Freesolve RMS which we believe can be a competitive resorbable metallic capital technology and play into the emerging theme of leave nothing or leave less behind.

Our BIOMAG platform is progressing rapidly. The data from BIOMAG-I with 3-year follow-up shows compelling evidence with a target lesion failure rate remaining at 3.5% and no new major events between 18 and 36 months. The BIOMAG-II seek clinical trial is ahead of schedule with more than 50% of patients enrolled and will deliver 1 year results by the end of 2027. The BIOMAG LL, long-length, seek clinical trial is on track in Europe and Asia with patients currently enrolling and the BIOMAG-III U.S. trial is in the finalization stage. We have further intention to maximize the indication potential of core competencies, such as Freesolve below the knee, which already has FDA breakthrough device designation. Finally, we're accelerating our geographical expansion and are prioritizing Asian markets such as Japan.

By uniting Teleflex Interventional and Vascular Intervention, we're demonstrating our commitment investment and focus on the coronary and peripheral vascular markets by creating a position in the market as a meaningful contender. I will now turn it over to Dr. Chris Buller to lead a panel discussion with our esteemed physician guests. Dr. Buller.

Thanks, Thierry. My name is Chris Buller. I'm the Global Medical Director for Interventional here at Teleflex, and I'm delighted to have with me Dr. Kevin Croce and Dr. Elliot Smith, who have joined for a panel discussion today. Kevin Croce is the Director of complex coronary intervention at Brigham and Women's Hospital in Boston. He's the Director of their translational discovery lab as well and, of course, a faculty member of the Harvard Medical School. Also with us is Elliot Smith Dr. Smith is an interventional cardiologist at London's St. Barts and Royal Free Hospitals, where he's really become the national and international face of what is one of the largest PCI programs anywhere and certainly in the United Kingdom. Welcome to both of you. Kevin, why don't you just take a moment to describe your current practice or what does a day or a week look like for you?

Thanks, Chris. I am faculty at the Brigham and Women's Hospital, which is a large teaching hospital affiliated with Harvard Medical School in Boston. I run our complex PCI program. My practice is focused on procedural medicine. I spent about 3 days in the cath lab, treating complex PCI and CTO patients. And then the rest of my time is involved in research and education. I run an entity called the Translational Discovery Lab, which is a large animal and cadaver lab where we partner with lots of companies like Teleflex to develop new technologies in the interventional space and new therapies for coronary artery disease.

Elliot, I thought we'd give the audience just a moment to understand what your practice looks like at Barts and Royal Free.

I am based in London at Bart Heart Center, which is one of the largest U.K. centers for interventional cardiology and for cardiac surgery as well. where we do around 3,500 PCIs a year and where about 70% of that work is Acute Corning syndrome work, 30% would be Elective. My practice is predominantly in the higher risk and complex category performing coronary interventions and also specifically for Chronic Total Occlusions.

I wondered if you could give me some general impressions of the products that you're aware of from BIOTRONIK that you've seen both in your own lab and, of course, in use during your travels as a teacher.

So I think we'd start with BIOTRONIK being a well-known, well-respected, reliable source of coronary stent technologies in the first instance. And the key offering is the Orsiro stent, which we know is an ultra-thin platform with a fully biodegradable polymer, which can be used and has been extensively studied in huge populations over a number of trials and over a number of years. In addition, I'm familiar with the Freesolve technology, the bioresorbable magnesium scaffold that we are currently seeing emerging currently in the clinical trial setting and we're a center for one of those trials at a heart center.

And then the drug-coated balloon technology, the Pantera Lux is the other therapy. So these are all destination therapies, if you like. But in addition to that, more recently, since the interaction with Teleflex. Then there's also the range of technologies that are there to help you deliver and facilitate your procedure. So microcatheters some wires and, in particular, guide extensions and specialist guide extensions. So I suppose that would really be the offering from BIOTRONIK that I would be familiar with.

Thanks Elliot. Kevin, I wonder if we could talk a little more specifically about BIOTRONIKs drug-eluting stent, the Orsiro Mission platform that is now the commercial device. Maybe start with the design of that and its mechanical characteristics, what you know about them, how it performs intraprocedurally?

Happy to, Chris. It's a very good stent in terms of its deliverability and the value proposition of its designed with thin struts, going back to my experience as a vascular biologist in both my PhD training and in several postoperal fellowships. A large part of what I spent my time training on was how arteries become inflamed and how they heal and inherently a thinner strut stent like the BIOTRONIK stent has positive effects with regard to patients getting a stent result that tends to heal better and induces less flow perturbation as blood flows through the stent while it is healing and certainly is associated with better properties with regard to healing, less restenosis and patency at least from a mechanistic standpoint.

So when we think about the design of the stent, it was designed in a rational manner to hopefully perform better. And outside of that, what interventions look at outside as you know, the form each function designed in a way where it potentially delivers better outcomes, how usable is it really what interventions, let's think a lot about is deliverability. And if stents are becoming longer for more complex disease. And we try to do our cases through the radial artery and the wrist, where there's potentially a limitation in terms of the size of catheters that physicians are willing to put in, which gives you a little less pushability, a stent which has a favorable design from a strut thickness that delivers easily is something which is certainly a positive as we think about where this has a place in treating the patients that we see every day in the cath lab.

Kevin, what's your view of the evidence basis for Orsiro, the scale of the evidence, if you will, and the performance of Orsiro in long-term studies?

I alluded to this earlier, rational design to hopefully a better outcome, thinking about the stent, the strut thickness and the drug, with thinner stents, you're hopefully going to have a favorable response to arterial healing. And what I mean by that is it heals well, there's less turbulence and you get less restenosis, which is borne out in an endpoint often called Target Lesion Revascularization, TLR, or Target Vessel Failure TVF, which I think from the standpoint that if you've got a senti delivers well, it is easy to use and has a favorable metric of not failing as much, that's certainly an advantage.

And then I think that there's an opportunity to revisit that because if you think about the fact that somewhere between 1 and 5 to 1 and 7 stents that we place are going to fail between 5 and 10 years out that's an advantage both to the poor patient who has to come back for another procedure or potentially has some terrible event for it, but also to our health care system and those of us who put these in patients where we want to be able to keep them from having to come back many years later.

Dr. Smith, I wonder if you could share your perspective on this topic.

So I suppose the real question is what is it that we want out of the coronary stent platform. And what we want is durability and reliability of the device itself once it's in we want to have deliverability. We want to be able to get it over into the vessel, into the target lesion. And we want retention. We don't want the thing to come off or come away. So those are some key aspects that we're looking for. And there are specific design characteristics. And I suppose the one that jumps out is the Ultra thin strut technology. The fact that it has a slightly thinner strut, particularly in the smaller devices than any of the other competitors is potentially desirable, particularly in terms of theoretically for deliverability and also particularly in those smaller vessels that you're leaving less metallic footprint.

Then there is the polymer, whether it's desirable for the polymer to completely disappear or whether some polymer can remain and be inert as an area for discussion. So that's something that we could come back to.

So I suppose the third thing really that I would talk about from my own personal perspective, that tends to get overlooked a little bit is the expansion characteristics of a particular platform. We know that coronary arteries taper and if you're covering long lesions, you may want a much smaller diameter distally and a much bigger diameter proximally. And sometimes the only way to do that is to do it with overlapping stents. So one of the desirable characteristics, certainly for me for the BIOTRONIK device is the fact that you can take the 2.5 platform up to larger diameters and therefore, hopefully, maintain its radial strength and its integrity. I think that's actually very important and potentially overlooked.

You'd talked about the importance of avoiding stent overlap, there are under development new, very long lengths and very large diameter Orsiro Mission devices on the way in terms of length, we're going to see devices up to 48 millimeters, and we're going to have devices that are capable of expanding beyond 6 millimeters diameter, are those going to be useful additions to the range of sizes of Orsiro in your practice?

Yes, I think they actually are. And it's interesting because we'll speak to a little prejudice now if you see what I mean. That in a world where we're moving towards leaving less metal work behind why an Earth would we want much longer platforms with much bigger diameters. But we're dealing particularly at the complex end of the spectrum. With some areas of disease that simply do need to be covered by stent strut. And they are long, they're complex, they may be tortuous. And they taper. And we're dealing with left main stems where they are not dedicated technologies available that readily will expand up to 6 millimeters and even beyond where we know that there are vessels that require exactly those characteristics.

We've even seen and you may remember this from some years ago, we were having to put biliary stents, into some arteries because they weren't appropriately sized. So I think there will definitely be a market for longer stents. There's no doubt about that. And I think they are going up to 50 millimeters or 48 millimeters is a sensible move and also speaks to competition within the marketplace. But I think that safely having good expansion characteristics with good radio radial integrity up to 6 millimeters or even beyond, is going to be very important.

Kevin, you've established a rather unique program for patients with stent failure, often repetitive stent failure, you're one of just a very few hospitals that have intracoronary brachytherapy still available. So you very much see the worst consequences of stent failure in your practice at the Brigham. I wonder what that means for you as you consider the concept of leaving less behind during PCI and whether you feel that, that is a direction that we are wise to pursue as a community or whether it's a false alley?

We treat somewhere between 120 and 180 patients every year. that are referred into us for advanced stent failure treatment. And the typical cadence of these cases is if you have a young patient who 8 years earlier had a stent in an artery that stent failed and a second stent went into it, and you've got these multiple cages of metal that start to crowd the lumen or the blood carrying capacity. They are when it comes time to treat the intent -- it's really, really tough to get the metal stent to expand. That's the worst-case scenario, multilayer, sent with instant incident restenosis, which not having drug-coated balloons in the United States, there's a lot of patients who suffer from that, and it's made us very, very busy with remediating stents that our multilayer are often under expanded, and we have to work really, really hard to try to make the lumen big again to then be able to apply some antiproliferative therapy to deliver a result which is hopefully going to be durable. And despite best efforts, a lot of these patients still come back.

So if you step back to the beginning, even in the first layer of stent, if it tends to reach those, because of aggressive coronary disease. It's much, much easier to retreat that patient if the artery is not constrained by a durable metal scaffold, which remains behind after the drug is diluted. If you think about the fact that set things, they prevent recoil, they deliver drug to reduce restenosis, and they pack up dissections when you have them, once the recoil has been prevented acutely, the artery often will remodel to stay big and open. The drug goes away and the dissection will heal.

So the idea that in patients that suffer from restenosis, which there's going to be some effective rate no matter what we do because of the advanced disease that patients have. If you have a scenario where there's renarrowing but you're not fighting with a metal cage, to try to reestablish the size of the looming. It's going to be super advantageous, and we are earning desperately for technologies to do this. Especially in young patients that come in with heart attacks. I mean if a 45-year-old patient comes into the cath lab you place a stent, they're going to have to live with that spend for the next 50 years or longer potentially. And so that stent when it renarrows is really a bar, it's super tough to treat because the metal that was left behind makes it difficult to establish a large lumen size and establishing a large lumen size when treating in stent restenosis, we know is the most important thing in helping that are stay open again. And so if we're able to do that with the page, it prevents us from expanding the artery, expanding the tissue I believe strongly, it's really helped, and we're super excited about resorbable technologies in the coronary space.

Elliot, let's chat for a few minutes about pipeline. And I do want to emphasize here that we're talking about products that are not yet approved or fully approved for some of the indications that we will be discussing. But one that is perhaps receiving the most attention from the interventional community is the bioresorbable magnesium scaffold the Freesolve device, which is the third generation mechanically of the BIOTRONIK resorbable technology. What are you hearing about? What do you know about it? And how does it fit in to a concept of leaving less permanent appliance behind in the coronary arteries of patients who have been treated with PCI?

I think is hugely significant. I think it's very exciting, and I think it's hugely important. We have seen a global move towards trying to leave less metal work behind for very good reason to avoid causing problems with future interventions to avoid jailing side branches to avoid treating longer and diffuse lesions distally, particularly where someone might later be able to have a bypass operation which would not be able to take place when we leave metal work behind.

So there has long been a desire to be able to leave very little behind. And so much so that now in the era of drug-coated balloons, there has become a narrative that when you do put a stent in, you're caging the vessel and you may even be harming the vessel, whereas previously you were taming it. And so there's been a sort of huge move, particularly with the latest devices towards using drug-coated balloons only. But drug-coated balloons only leave a problem. And that is that vessels can abruptly close and they can dissect and it can be unpredictable. And so you can't always use drug-coated billions in those settings. I think the bioresorbable story is extremely important for that reason because I think that there will always be a need for stent and that to be able to have a stent that offers the promise of dealing with the immediate radial strength problem and preventing restenosis early, but then disappearing and leaving an intact improved blood vessel behind is going to be important.

And I think that it was particularly important that BIOTRONIK continued on that journey when the first iterations from -- in the bioresorbable space, which were with polymeric stents, didn't work. There was a move away completely from dealing with that concept. The concept was brilliant. The first iteration wasn't, but the concept was still important. And the fact that you've continued with that concept and are now bringing a new offering with the magnesium scaffold market is going to be hugely important.

Kevin tell us what you know about Freesolve and perhaps contrast it with prior buyer experience with absorbable scaffolds in humans.

Yes, the absorbable scaffolds, which were approved in use, particularly the Abbott product was a good device, but it was first generation. And it's very different than the magnesium Scot fold, which BIOTRONIK has been developing. But the first thing you can look at is strut thickness. One of the negatives about the older generation bioresorbable scaffold is that it was pretty thick, and it was difficult to deliver. It was difficult to see. If you expanded it over its expansion range, you tended to fracture. And so just we talked a little bit earlier about thin strut stents potentially having an advantage thinner strut devices are going to be better. And my understanding for the Freesolve magnesium resorbables, the structure are much thinner than prior versions of bioresorbable scaffolds, which has been brought to market. And so inherently, that had some advantage.

And I think the fact that metal potentially has a better scaffolding capacity for some of the polymer BRS platform is going to be helpful. And then the fact that it takes about a year or so, I've been told for the scaffold to resorb is great because going back to the fact that the three things stents do, they prevent recoil, they pack up dissections and they deliver drug. In my mind, the fact that it stays around for an optimal period of time to allow all that remodeling and healing to establish and buttress a large lumen. But as the device goes away, the hope and the early data looks good, that the area is going to stay open and you're not going to leave a cage behind, which it is going to make it super, super difficult if the patient does happen to suffer from a restenosis event in that area. Your options are completely open in terms of what you can do.

And additionally, we have so many -- it's sad, patients that have full metal jackets of stent and arteries, which prevents them from having bypass surgery and all sorts of stuff might try to do after they've had recurrent stent failure multiple times. And so we love the concept of a leave nothing behind technology, especially one that is gone in a relatively fast period of time, that has thin strut and is able to buttress the artery to keep it open and then go away.

Let's change gears or a second and talk about PK Papyrus. You mentioned that earlier on, Kevin, I'd like to hear how PK Papyrus fits into your current algorithm for managing coronary dissections and perhaps just share with us coronary perforations as a problem for interventional cardiologists and more importantly, for patients.

Yes. So probably in some part why I have gray hair is that Complex PCI patients are more difficult procedures. And chronic occlusion patients, which are another focus of our practice are more difficult procedures. They're more difficult because they take longer getting your wires into the downstream artery to be able to balloon and stent for a chronic to occlusion of 100% blockage, which is long-standing takes longer, it's harder to do. But the other thing we know from robust data sets is that for complex PCI and for CTOs, there is a higher rate of perforations.

And so as a complex PCI TT operator, unfortunately, and it's a little stressful for what we do, a higher rate of perforation is part and parcel with what we do. It's an invariably difficult part of our job that comes from tackling the hardest cases. So because of what I do, despite being careful, there's no getting around the fact that there's about a 4% perforation rate. And we do several hundred these cases a year, so I'm somewhere between 8 to 20 of these year, depending on how busy we are.

And so we get pretty practiced at dealing with them. And it's terrifying, right? There's probably nothing else in what we do in interventional cardiology that's as time-sensitive as getting a perforation seal. Because you have a coronary perforation, you get a pocket of blood around the heart, it compresses a chamber. And if you don't get rid of that blood, the patient will not do well, and they can often pass.

Perforations had the highest mortality in cath lab for anything we do. And so avoiding them. But when you have them, which in complex PCI or even in regular PCI cases, there's a set number that is published somewhere between 0.4% for simple cases to upwards the 4% to 5% for complicated cases where these things are going to happen. Unfortunately, it's a cost of new business. It's lethal for patients if we don't address it quickly. There's a lot going on. You're trying to stabilize the patient, stop the bleeding, support their blood pressure. Sometimes, we have to put in mechanical circuitory support. And so you're really going through in these cases that an amazingly quick need to task prioritize to deal with one problem than another. And anything we can do to speed the capacity of covering the hole in the coronary artery really is transformative from a destressing from an expediency of care and from a saving a patient's life.

And so the older technology we had was much, much more difficult to deal with. It was incredibly stiff. The majority of intervention is done in the United States to use something called a Six French guiding catheter. It's a relatively small tube through which we place our balloons and stents. The larger sizes of the [ geometric ] stent wouldn't fit in the equipment that we had in the coronary artery. So you imagine that you get a hole in an artery, you put a balloon up to stop the bleeding. The patient's artery is blocked, having chest pains because they have no flow. And you have to put a second guide catheter in. You have to get another hole and another artery bring another tube up to the heart only because the coverage stent you need to put in, won't fit in the equipment you already have in the artery. That's really, really difficult.

And so as soon as Papyrus came out, one of the nice things about it is many of the size and the majority are actually Five French compatible. That goes through relatively small catheters which allows you to do all sorts of cool stuff. If you've got a Six French guide catheter, the one standard we used, and you want to be able to kind of get the Papyrus down, it will actually go through these great little guide extenders, which we have to help deliver these tools.

And so being, unfortunately, because of what I view an expert in treating perforations we are so excited that we've done a better tool that we used to have. And the minute Papyrus was U.S. commercially available, I was calling to be able to get it ourselves because it's transformative. And I believe this technology saves patients' lives because the time needed to place a Papyrus is so much less than the prior technologies. And I mean a credit to BIOTRONIK were going through all the difficulty to get this to the United States. But physicians and more importantly, patients are way better off because of it.

It's a tool I presume that you think has to be in every lab. Is that a fair statement?

Without question. And if I was going to a hospital tomorrow leave my current practice, the administration, I would have built them mercilessly until they got it on the shelf compared to the older technologies. And so for us, it was a conversation of how many do we buy, what are we okay in terms of stocking. And we made darn sure if we use a couple of them. We've got them replaced by the next morning, especially because of what we do. And so it is a life-saving thing every lab should have.

I want to thank you both, Elliot and Kevin, for your time today. It's been a very helpful conversation. Your insights are remarkable. I know that we'll have questions that arise, and I look forward to hearing and addressing those. So thanks so much. We'll let you get back to your busy days in the cath lab in Boston and in London. Over to you now, Liam.

Thank you, Dr. Buller. We are very excited about the recent Vascular Intervention acquisition. We believe it's a strong strategic fit for Teleflex and a major step forward for our interventional business. .

This acquisition brings a highly complementary product portfolio that strengthens our offering in the coronary intervention space, which is seeing mid-single-digit growth. While giving us new access to the fast-growing high single-digit growth Peripheral Intervention segment. It enables us to deliver more complete differentiated solutions for cath lab procedures that helps us better serve both existing customers and new markets.

We will have a unique combination of three technologies with drug-eluting stents drug-coated balloons and resorbable magnesium scaffolds, which allows us to be truly objective when it comes to promotion of device selection for the best patient outcome for any given procedure.

The Vascular Intervention business, which generates approximately half of its revenues in EMEA balances our geographic revenue mix with more than half of our legacy Teleflex Interventional revenues being sourced in North America. The combination of the two businesses creates a clear opportunity to leverage our commercial infrastructure to accelerate growth through enhanced access to cath labs on a global basis.

The combination of our two companies will allow us to expand our customer engagement and clinical education program. We are confident in the revenue synergies this acquisition will bring over time. The combined Teleflex Interventional and Vascular Intervention sales force will have increased global presence. We are also positioned to convert select existing Vascular Intervention distributors to direct sales, leveraging the Teleflex global footprint.

By expanding our sales force and offering a more comprehensive suite of coronary and peripheral cath lab products, we will be better positioned to gain market share. This includes the potential for expanding registrations to new geographies, unique product opportunities such as FDA-cleared solutions for coronary perforations and even longer-term upside optionality potential through innovations like Freesolve.

As discussed by the clinicians on this call, Freesolve is a promising technology that provides a resorbable scaffold option for interventional procedures. We look forward to the data readout from BIOMAG-II in late 2027.

From a financial perspective, the Vascular Intervention business has a strong gross margin, which is comparable to the Teleflex corporate average. And as revenues expand, and we drive efficiencies in the business, we see opportunities to expand operating margins over the next several years.

Moving on to integration of the Vascular Intervention business. We have owned the acquired business for 4.5 months and are meeting the milestones laid out in our deal model. We will continue to focus on integration activities over the next 12 to 18 months to position us for strong growth. In summary, the Vascular Intervention acquisition strengthens our portfolio, expands our commercial reach and reinforces our commitment to innovation and growth. and we couldn't be more excited about what it means for the future of Teleflex. That concludes my prepared remarks. Now I'd like to turn the call back to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Patrick Wood with Morgan Stanley.

Beautiful. I'll keep it to just the one. Obviously, you've had this for 4.5 months, but we saw the growth last quarter, I think it was 7% or so. So running ahead of the underlying markets already, but yet quite EMEA exposed today, which is obviously a slightly slower volume growth area. So like in the existing , we can see the opportunity on resorbable scaffolding. But in the existing assets and DCBs that you're running today in the business, what's driving that growth that's above the market already today? Is that you're starting to put out to new accounts? Or help us understand how you guys are doing that already.

Patrick, thanks for the question. Yes, you're absolutely correct. We grew 7% approximately in the quarter. Geographically, we had strong performances in all the geographies. Everything came in pretty much in line that we were expecting.

From a product perspective, where the growth came from the drug-eluting stents were pretty much flat. So that wasn't a big driver. But the big driver was coming from the covered stents and the drug-coated balloons in both the coronary and the peripheral, we saw really solid growth in those areas. And obviously, peripheral markets are growing in the upper single digits. And we have -- we've obviously grown above that market rate as well. So we grew above the key market rates.

And with regard to the other part of your question, Patrick, is a combination. It's a little bit too early to get the benefit from that yet, Patrick. We would anticipate as we bring these sales forces more and more together, training is going on right now as I speak with the organizations, and we would expect to see that impact begin in 2026 and beyond.

Your next question comes from the line of Ravi Misra with Truist Securities.

Thanks, Liam, and thanks, everyone, for joining us. Just kind of on the kind of growth profile of VSI. Can you maybe help us understand that 6% growth rate, how does that kind of fit in with where the portfolio is today? And kind of where could that go, do you think, in 3 years? It sounds like kind of with BIOMAG-II readout end of 2027. A that's maybe a 2028 kind of approval type product. I mean how much acceleration do you guys kind of contemplate if the study details are positive?

So I think -- Ravi, thanks for the question, first of all, and thanks for joining the call. I think that as we look at this, a good start as my mother used to say, is half the battle. And right out of the gate in our first quarter of ownership, we were pleased with the growth rate. Regarding your question on the BIOMAG-II, you're accurate. That study should be published in 2027, and we should have an impact as we go through to 2028.

I would remind you, Ravi, it is already CE marked from the previous study, but we do need the BIOMAG-II to in order to be able to make claims out there in the marketplace and to accelerate the growth. The longer term, our view on this asset has not changed. We always said it would grow 6% plus. Nothing has changed in my outlook for 6% plus growth from the VI business. And I like the optionality of Freesolve into the future. As you heard from our two clinicians, Dr. Smith and Dr. Croce. Dr. Smith has actually placed Freesolve as part of the clinical trial. And this concept are focusing on complex PCI and this concept of leave nothing behind we are front and center in that with this type of a technology and looking forward to bringing it to the market, looking forward to kicking off the BIOMAG-III study. So thanks for the question, Ravi.

I think you set it up and right into my follow-up. I guess maybe for the clinicians, but I was trying to understand how meaningful could the study be in terms of this philosophy and perhaps creating a definitive outcome to the debate, I believe, nothing behind? Or is there an additional clinical work across industry that would need to be done on that front?

Yes. There's Ravi. Our two doctors had to go and save patients live, so we didn't want to hold them from that. But Dr. Buller is still with it. So Chris, if you don't mind, I might ask you to answer that question.

Sure thing. And it's not a simple answer. I think it's important to understand that the readout at 12 months of BIOMAG-II in 2027 is not the final answer on the performance of this device by any means. We'll be accruing data through 5 years. And it's really between year 1 and year 5 when we expect a fully resorbable technology to show its best performance when it's gone away and when the downside of having ongoing metallic stents in the artery has disappeared. So '27 will be the beginning of the story. And the story will continue to be told over the following 5 years for BIOMAG-II and another -- roughly a 2-year lag behind that for the full 5-year results from BIOMAG-III, the North American pivotal.

So it's going to be an evolving story. And with noninferiority, we suspect shown at 2027 and then superiority will be what we're looking for going forward. If we achieve superiority, of course, then all that are off on what this would look like in the marketplace.

Your next question comes from the line of Larry Biegelsen with Wells Fargo.

Liam and Larry, just a couple of near-term ones. So the drug-eluting stent portfolio, Liam, Orsiro has terrific data from BIOFLOW V, et cetera. You said it was flat. Liam, in your hands under Teleflex, can you grow that franchise? And just remind us of the BIOTRONIK sales that you acquired, how much -- what percent is Orsiro?

Yes, Larry, thank you very much for the question, and thanks for joining us. As we -- as is normal, we don't break out individual components. It's a chunk of the revenue, Larry, but there's a lot more to the vascular interventions business than drug-eluting stents. And that's what we were trying to convey today. You've got covered stents. You got coronary balloon, which is Pantera, the docs spoke about. You've got drug-coated balloons, the Passeo that the docs spoke about. And we also have, like I said earlier, the optionality coming with the -- following the leave nothing behind as we continue to focus and niche out the complex PCI market where we already have a beachhead with many of our complex catheters.

Regarding the growth profile of our serial, the drug-eluting stent, I'm actually going to ask Matt James with us here to cover some of that for me, Matt.

Yes. Thanks, Liam. Larry, thanks for the question. So as you say, we probably arguably have the best for eluting stent on the market in Orsiro mission. It's probably the most studied stent in the market and has some strong clinical data behind it. So Vascular Intervention is technically and engineering-wise, a fantastic company, developing great products. I think they had some issues penetrating the U.S. market due to scale.

Only 25% of their revenue is in the U.S. So they struggle to gain access to the cath lab, and that's where the synergy benefit really that Teleflex can bring is a benefit. We have great access to the cath lab with our tools with complex PCI and CTO and great relationships. So that looking forward, I think that's what's really going to make the difference.

Okay. That's helpful. Just for my follow-up, Liam, on Pantera and Passeo, the DCBs. Those are available outside the U.S., I believe. It sounds like there's no plan to bring those to the U.S. Is that correct? And just maybe if you could tell us why that is?

Yes. In the immediate term, Larry, I would agree with you. We don't have plans to launch them immediately. There are some IP considerations with the coating technologies that are on those products. In the longer term, I think that barrier lessens and it's ultimately removed in the future, and we would envision an opportunity to bring them to the market in the U.S. in the longer term. And we're working through that right now with the team. And I think that you will ultimately see those products for sale and available in the U.S. market in the coming years, Larry. And as always, good insight by you into this market.

Your next question comes from the line of Matthew O'Brien with Piper Sandler.

I'll ask them both upfront here. Liam, historically, you guys have done a really nice job of taking assets, integrating them and then getting a halo effect out of it. So can you just talk about some of the opportunities you're seeing owning the BIOTRONIK assets now in terms of new accounts and halo benefits?

And then the second question -- and you know I'm a simpleton here, but we've seen these bioresorbable stents historically, trying to enter the market and unsuccessfully uniformity of how they're absorbing has been an issue, what is it that's unique now with Freesolve that you've solved for where this can be a successful product eventually versus some of the historical challenges that we've seen with other companies trying to bring this type of technology to the market?

Yes. I'll ask Dr. Buller to answer the Freesolve question in a moment. But I will say there's a massive difference, Matt, between the predecessors, which were based polymer-based and had some issues versus a magnesium absorbable stent, scaffold. Regarding the halo effect, Matt, I think that I'll just cover it for a second with the area of focus, and I'll ask Matt James, who's with me here to cover as well. So if you got me, Matt and then to Dr. Buller.

So from the halo effect, one area, I think, that's really important for the investment community to understand is our acute focus on complex PCI. We already have a strong presence in complex PCI with our complex catheters at the likes of the GuideLiner, TrapLiner, Turnpike. And I'll ask Matt now to elaborate on the halo effect from putting these two businesses together.

Yes. Thanks, Matt. Yes, the Teleflex and the VI portfolios fit together really well. We've got now market-leading tools across most steps of the complex PCI procedure from access with our GuideLiner and TrapLiner devices, to lesion crossing with Turnpike and SuperCross to therapy with the Orsiro Mission and Pantera Lux and also complication management with PK for iris. So in terms of fitting together in halo effect, we cover the whole kind of range of steps of the procedure. So it's a very synergistic acquisition from a portfolio fit perspective, I would say.

And Chris, do you want to cover the difference between the Freesolve and the predecessors, please?

Sure. And I think Thierry is on the call as well. But essentially, without getting into the metallurgy of it, because that's outside my area of expertise. The alloy itself as well as the stent geometric design has evolved twice through what the internal project names were dreams, the DREAMS 1, DREAMS 2 and now DREAMS 3, which is the platform for Freesolve, a prior brand name being Magmaris.

And with the change in alloy and change in stent geometry, the mechanical performance of the stent as a scaffold itself on initial deployment has improved considerably. The effectiveness at reducing light loss has improved and, most importantly, perhaps, the evenness with which the device absorption is occurring is substantially improved so that you don't get as was the case with Absorb and was the case certainly with DREAMS 1, some uneven absorption that leaves pieces behind, so to speak, in the wall of the artery that are detatch from one another. It's interesting, actually, you may be aware of technologies that are unhinging conventional metallic stents over the first months and years of their deployment. The concern there that I have is that you are by intent leaving fractions of a stent in the wall of the artery and no one has to date thought that, that was a good thing to do. whereas with the current magnesium alloy in Freesolve, we see a very, very even and very predictable 12-month complete resolution of the metal.

And Thierry, would you like to comment on magnesium versus polymer from a technical aspect?

No. Absolutely. The big advantage of the metal is it will not bounce back. So if I deploy it, it will stay where it is, and that's very important for acute results. And really, the other big advantage of metals over polymers. Polymers really in the degradation or the overexpansion will have fractures. And that a very irregular process, as a lot of discontinuities the support really changes dramatically quickly. In this case, we get resorption through an erosion of the surface of the scaffold. So we really just gradually decrease that radial strength until really it's not needed. So we don't have these step changes and allows for a much more uniform healing of the vessel.

I think another thing that I just want to highlight maybe from my engineering background is we really used the Orsiro as our benchmark in designing the Freesolve. We didn't want to have the physicians to have any compromises in their acute performance, deliverability, how does this feel? How do I need to think about treating the lesion to really simplify the work of the physicians.

On the opposite, the polymer scaffold, require more care, more attention, more lesion preparation. So I think we have some very strong advantages there with the magnesium technology.

Your next question comes from the line of Shagun Singh with RBC.

Just two quick ones for me. Could you talk about the competitive landscape a little bit and how you think the portfolio changes the current treatment paradigm? Where are you most excited? And then, Liam, I know you've previously indicated that this acquisition really positions you differently and allow -- would allow you to do differentiated M&A going forward. So just curious to get your early thoughts on where you could further boost this portfolio? I know there's a lot in the pipeline already and how you think about adjacencies that you could look into?

Thank you very much, Shagun, I'll ask Matt to comment on the competitive landscape. I think Shagun for the next 12 months, we're going to focus on the integration of BIOTRONIK and taking it into Teleflex. And then we'll make a decision as to where tuck-in adjacencies would be a possibility for us.

With regard to the competitive landscape, I think that when we bought brought Vascular Solutions into Teleflex, I think we demonstrated our ability to expand and to focus in certain areas. And our focus has definitely been and I think the biggest competitive advantage we have to get math started is a focus on complex PCI. That is where we are incredibly strong. That is where we can bring these products together. And Matt can expand on that if I ask you to, Matt, please.

Yes. Thanks, Yes. So to expand on that, we're really focused on that complex PCI and CTO space. So that's really the sweet spot for our portfolio rather than the whole of the PCI market, and it's a faster growing subsegment of that bigger PCI market with vascular interventions, we've added those market-leading therapeutic devices to a comprehensive range of complex PCI and CTO tools. So the complex PCI market is really where we're playing and where we're really well known.

As I said before, we cover a large portion of the procedure now. We have really, really good strong access to cath labs for both sides of the business. With the acquisition, we have an expanded sales footprint, allowing it to service more customers more often push into new geographies.

Alongside that, the new product pipeline, as we've heard from Thierry is set to deliver a strong cadence of short-term incremental products as well as more strategic long-term transformational products. And at the end of the day, it's really all about adding value in the cath lab and helping customers to achieve better patient outcomes with products, people, support, innovation, education and that's where those high-value engagement programs that I mentioned in the prepared remarks really are going to make an impact.

Your next question comes from the line of Travis Steed with Bank of America Securities.

This is a [indiscernible] on for Travis. Quick one for me. Can you remind us what percentage of the acquired products are currently available in the United States. And obviously, it sounds like you're doing a number of things to generate the data to bring certain products into the market. But is the target to eventually get 100% coverage of the acquired products in the United States?

Yes. Thanks for the question. As you know, 50% of the revenues in EMEA, about 1/4 in the United States and 1/4 in Asia Pacific. So I think there's obviously opportunity wins within the United States. The bulk of the portfolio is available within the United States with the exception both the coronary and peripheral drug-coated balloons that we discussed a little bit earlier with Larry. And it is our intention to bring those products into the marketplace.

New product launches will be on a global basis, and as Thierry outlined, we have a robust pipeline of new products coming to the market. They will be launched globally simultaneously in Europe and in the United States and just from registrations a little bit delayed is the normal cadence in Asia Pacific and in Latin America just because of registrations. But yes, in the future, you will see all products, new products brought to the global market. And we will also have programs to bring some of these other technologies to the United States.

There are no further questions at this time. I would now like to turn the call back over to Laurence Keusch for closing remarks. Please go ahead.

Thank you, Eric, and thank you to those that joined us on the call this morning. I hope that it provides some increased insights into the Vascular Intervention business that we recently acquired. And at this point, this will conclude our event.

You may now disconnect your lines.

Good morning, ladies and gentlemen, and welcome to the Teleflex Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

And now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development.

Good morning, everyone, and welcome to the Teleflex Inc. Third Quarter 2025 Earnings Conference Call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Liam Kelly, Chairman, President and Chief Executive Officer; and John Deren, Executive Vice President and Chief Financial Officer. Liam and John will provide prepared remarks, and then we will open the call to Q&A.

Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website.

Now I'll turn the call over to Liam for his remarks.

Thank you, Larry, and good morning, everyone. I would like to begin today with comments on our corporate strategy. In order to best position the company for enhanced value creation, we have continued to take decisive action to unlock value within our business. This includes the previously announced separation of Teleflex into 2 independent companies, RemainCo and NewCo. In line with our commitment to maximizing value for our shareholders, our Board and management have been continuing to actively advance the process for a potential sale of NewCo, which is now our priority. There continues to be a healthy interest in NewCo, and we are pleased with the momentum and stage in the process.

Once the separation process is complete, each business will be best positioned for the future, with more focused strategic direction, simplified operating models, streamlined manufacturing footprint and individually tailored capital allocation strategies aligned with their respective growth philosophy and objectives. As a reminder, the creation of RemainCo will create an optimized portfolio focused on highly complementary business units, Vascular Access, interventional and surgical. NewCo will be able to identify, invest in and capitalize on opportunities that are unique to urology, acute care, including intra-aortic balloon pumps and catheters and OEM end markets. Importantly, our guiding principles continue to focus on maximizing shareholder value through this process. Should a sale be consummated, we intend to utilize proceeds to balance pay down of debt and return capital to our shareholders.

Before I turn to our third quarter results, I would like to provide an update regarding changes in the Italian payback measure. As a reminder, the major states that if Italian public hospitals spend more than the national budget allows on medical devices, manufacturers that generate revenue in the country must pay back part of the excess cost to the government.

In June 2025, the Italian government proposed a significant discount under this measure, which became effective in August. The amended law reduced the amount owed by affected companies, including Teleflex, for the years 2015 through 2018. These legislative changes and the resulting adjustment to our reserve calculation beyond 2018 resulted in a $23.7 million decrease in our reserve and a corresponding increase to EMEA revenue for the 3 and 9 months ended September 28, 2025, of which $20.1 million pertained to prior periods. Since the amount related to prior years does not represent normal adjustments to revenue and is nonrecurring in nature, we have excluded a $20.1 million increase in revenue related to the prior year's from adjusted third quarter 2025 revenue to facilitate an evaluation of our current operating performance and a comparison to our past operating performance.

Now moving to the agenda for the remainder of this morning's call. We will discuss the third quarter results, review commercial highlights and conclude with our updated financial guidance for 2025.

Overall, we are pleased with our execution in the quarter, with third quarter revenues of $913 million, an increase of 19.4% year-over-year on a GAAP basis. When excluding the prior year impact of the Italian payback measure, adjusted revenues for the third quarter were $892.9 million, up 16.8% year-over-year on a reported basis and up 15.3% on an adjusted constant currency basis.

Constant currency revenue growth improved sequentially in the third quarter, excluding the impact of the acquired Vascular Interventions business as we work to drive operational excellence across our business. Excluding the impact of acquired Vascular Intervention revenues, constant currency growth was 2.3% year-over-year. Third quarter adjusted earnings per share were $3.67, a 5.2% increase year-over-year.

Now let's turn to a deeper dive into our third quarter revenue performance. I will begin with a review of our geographic segment revenues for the third quarter. All growth rates that I refer to are on a year-over-year adjusted constant currency basis, unless otherwise noted, and include the impact of the acquired Vascular Intervention business.

Americas revenues were $555.9 million, a 7.5% increase year-over-year, with the acquired Vascular Intervention business representing the largest contributor to growth. Excluding the Vascular Intervention business, growth in the quarter was driven by strength in our surgical, interventional and vascular businesses, partially offset by OEM declines and continued challenges in UroLift.

EMEA revenues were $214.1 million, a 34.4% increase year-over-year. During the quarter, growth was driven by the Vascular Intervention acquisition business. Excluding those acquisition revenues, we saw strength in our surgical, vascular and interventional businesses, which was partially offset by our anesthesia business, including the decreased volume of military orders in comparison to the prior year.

Now turning to Asia. Revenues were $122.9 million, a 25.3% increase year-over-year, driven primarily by the Vascular Intervention acquisitions. In the quarter, we recognized an approximately $9 million stocking order as part of our intra-aortic balloon pump and catheter growth strategy in China. And as expected, this was partially offset by volume-based procurement. We anticipate inventory exceeding this $9 million stocking order will be sold through by the end of 2025 as dynamics associated with tariffs stabilize, including timing of orders and tender activity.

Now let's move to a discussion of our third quarter revenues by global product category. Commentary on global product category growth for the third quarter will also be on a year-over-year adjusted constant currency basis, unless otherwise noted. Starting with Vascular Access. Revenue increased 4.3% year-over-year to $191 million, driven by our broad Vascular Access portfolio, including peripheral access, EZ-IO and central access products.

Moving to interventional. Revenue was $266.4 million, an increase of 76.4%. Excluding the impact of the Vascular Intervention acquisition, interventional revenues increased 9% year-over-year. The strong performance for the quarter was led by growth drivers such as intra-aortic balloon pump catheters, uncontrolled and complex catheters. The acquired Vascular Intervention business revenue was modestly ahead of our $99 million expectation for the third quarter, and increased 6.9% year-over-year on a reported basis. We continue to feel confident in our Vascular Intervention guidance of $204 million in revenue for the second half of 2025.

Intra-aortic balloon pump revenue growth declined year-over-year in the third quarter due to lower-than-expected order rates, predominantly in the United States. Specifically, we are seeing a slowing in conversions for pumps in the annual replacement cycle as well as less activity from hospital systems in replacing entire fleets of pumps. Although we had anticipated this dynamic in 2026, it has occurred sooner than expected. As a result, we have lowered our 2025 global balloon pump revenue expectations by $30 million at the midpoint of our constant currency guidance, with the vast majority of the reduction in the United States. Despite the revised outlook for pump demand in the second half of 2025, we have taken considerable market share and advanced our overall market position beginning in the fourth quarter of 2024.

Turning to anesthesia. Revenue decreased 1.4% to $101.4 million. Decreased military orders and softness in tracheostomy tubes were partially offset by growth in ET tubes and LMA single-use masks, along with a double-digit increase in hemostatic products in the United States.

In our surgical business, revenue was $122.9 million, an increase of 8.8%. Underlying trends in our core surgical franchise continued to be solid, with growth led by chest drainage and instrumentation in the quarter, partially offset by the expected impact of volume-based procurement in China. Our North America and EMEA surgical businesses, which are not impacted by volume-based procurement, each grew double digits in the quarter.

For interventional urology, revenue was $71.8 million, representing a decrease of 14.1%. While we saw strong double-digit growth for Barrigel, we continue to experience meaningful pressure on UroLift. OEM revenue decreased 3.9% to $80.4 million year-over-year, driven by customer inventory management. However, and as expected, we saw a sequential revenue increase compared to the previous quarter. Third quarter other revenue increased 3.1% to $59 million. Growth in the quarter was broad-based across the portfolio.

That completes my comments on the third quarter revenue performance. Turning now to clinical and commercial updates. BIOMAG-II, which is our European randomized controlled trial for the presold resorbable magnesium scaffold, has reached the midpoint ahead of schedule with over 1,000 patients now enrolled. BIOMAG-II is a prospective multicenter randomized controlled trial designed to evaluate the safety and clinical performance of free [ cells ] compared to a contemporary drug-eluting stent. The primary endpoint is target lesion failure rate at 12 months. We continue to expect the data readout for the BIOMAG-II study in 2027.

The integration activities for the acquired Vascular Intervention business are well underway and remain on track. A planned restructuring, as disclosed in today's press release, is aimed at reducing costs and increasing operational efficiency, and will include workforce reductions and the relocation of certain manufacturing operations to existing lower-cost locations. We expect the restructuring activities to be substantially completed by the end of 2028.

In our interventional urology business, we launched Barrigel in Japan during the third quarter following regulatory approval, insurance coverage and appropriate use criteria issuance. The commercialization in Japan marks a significant milestone in the global expansion of Barrigel. In 2022, prostate cancer was the most common cancer among men, with over 104,000 new cases. The launch of Barrigel in Japan aims to provide men with a safe, more precise treatment option, enhancing the quality of life for prostate cancer patients undergoing radiation therapy.

Barrigel offers enhanced precision and scope stability, allowing for real-time ultrasound guided placement tailored to individual patients. U.S. clinical data supports its efficacy, showing that 98% of patients achieved a significant reduction in rectal radiation exposure. The space has also been shown to significantly reduce both acute and long-term Grade 1 plus GI toxicity at 3 and 6 months compared to control. First cases in Japan were performed in early August, and we are actively engaging Japanese clinicians through training programs to ensure effective adoption of the technology.

That completes my prepared remarks. Now I would like to turn the call over to John for a more detailed review of our third quarter financial results. John?

Thanks, Liam, and good morning. Given Liam's discussion of the company's revenue performance, I'll begin with margins. For the quarter, adjusted gross margin was 57.3%. The 350 basis point decrease year-over-year was primarily due to the negative impact of tariffs and the negative impact of foreign exchange rates, and to a lesser extent, product mix and increased logistics and distribution costs.

Adjusted operating margin was 23.3% in the third quarter. The 400 basis point decrease reflects year-over-year gross margin pressure, higher operating expenses associated with the acquisition of the Vascular Intervention business, partially offset by cost controls across the remainder of our business, and negative impact of foreign exchange rates.

Adjusted net interest expense totaled $29.7 million in the third quarter as compared to $18.8 million in the prior year period. The year-over-year increase is primarily due to the borrowings used to finance the Vascular Intervention acquisition.

Our adjusted tax rate for the third quarter of 2025 was 9.1% compared to 13.6% in the prior year period. The year-over-year decrease is primarily due to the beneficial tax provisions included in the recently passed One Big Beautiful Bill Act, including the ability to deduct U.S.-based R&D expenses and other nonrecurring discrete impacts in the quarter.

At the bottom line, third quarter adjusted earnings per share was $3.67. The 5.2% increase year-over-year is primarily due to higher revenue and adjusted operating income, including the impact of the Vascular Intervention acquisition, a lower tax rate and share count, partially offset by the negative impact of interest expense and foreign exchange.

Now turning to select balance sheet and cash flow highlights. Cash flow from operations for the 9 months was $189 million compared to $435.6 million in the comparable prior year period. The $246.6 million decrease was primarily due to unfavorable changes in working capital as well as the prior period inflow of proceeds related to the pension plan termination. The unfavorable changes in working capital were primarily related to the Vascular Intervention acquisition, payments for tariffs, payments related to the proposed separation, cash tax payments for the final transition payment from the [ TJC Act ] of 2017 and foreign tax payments related to restructurings from prior periods.

Moving to the balance sheet. At the end of the third quarter, our cash and cash equivalents and restricted cash equivalents balance was $381.3 million as compared to $327.7 million as of year-end 2024. Net leverage at the quarter end was approximately 2.4x.

Turning to our updated financial guidance for 2025. We now expect total adjusted constant currency growth of 2025 to be in the range of 6.9% to 7.4%, which reflects the performance in the first 3 quarters of the year and our updated view for the fourth quarter of 2025. The reduction in the constant currency revenue outlook is primarily driven by a reduction in intra-aortic balloon pump revenue assumptions, primarily in the U.S., in the second half of 2025 due to our expectation for lower-than-anticipated order rates continuing through the fourth quarter.

We now expect a positive impact from foreign exchange of $32 million, representing an approximately 100 basis point tailwind to GAAP revenue growth in 2025. This compares to our prior guidance of approximately $26 million or an 85 basis point tailwind for 2025. The updated foreign exchange rate guidance assumes approximately a $1.16 average euro exchange rate for the fourth quarter of 2025.

For 2025, we now expect adjusted revenue growth to be in the range of 8% to 8.5% versus our prior guidance of 8.5% to 9.5%. This implies a revenue dollar range of $3.305 billion to $3.320 billion. This adjusted revenue range anchors our 2025 guidance and includes the acquired Vascular Intervention business, the third quarter performance, updated expectations for the fourth quarter and foreign exchange rates, and excludes the positive $20.1 million revenue adjustment related to the Italian payback measure for prior years. On a GAAP basis, revenue growth is expected to be 9.1% to 9.6% when including the $20.1 million revenue benefit of the Italian payback measure for prior years.

Additionally, for modeling purposes, you should consider the following: we expect 2025 adjusted gross margin to be approximately 59%. Regarding the impact of tariffs, I'm pleased to report that we've made good progress in our tariff mitigation strategies during the third quarter. Due to rate assumption changes and mitigation activities, we now estimate an impact of $25 million to $26 million in 2025 or approximately $0.50 per share, which is an improvement relative to our previous estimate of $29 million in 2025 or $0.55 per share. We expect adjusted operating margin to be approximately 24.5%.

Moving to items below the line. Net interest expense is now expected to be $93 million for 2025. We have refined our tax assumption for 2025 and now expect our tax rate to be approximately 12.5% versus our previous expectation for a 13.25% rate.

Turning to adjusted earnings per share. We are narrowing the range for 2025 to $14 to $14.20 from a range of $13.90 to $14.30. For the fourth quarter, adjusted constant currency growth is expected to be in the range of 14% to 15.8%, excluding a foreign exchange benefit of approximately $21 million.

That concludes my prepared remarks, and I would now like to turn the call back over to Liam for closing commentary.

Thanks, John. In closing, I will highlight our 3 key takeaways from the third quarter of 2025. First, we continued to make significant progress in executing our strategy. Third quarter revenue was in the range of guidance, while operating margin and earnings per share exceeded our expectations. For RemainCo, we are pleased with the performance for the first 9 months of 2025, and it is encouraging for our longer-term growth outlook.

Second, the Vascular Intervention business performed well in the quarter, achieving year-over-year reported revenue growth of 6.9%, which modestly exceeded our guidance. We are excited to provide a more detailed overview of the Vascular Intervention business in a virtual investor meeting, which is scheduled for November 14 at 8:00 a.m. Eastern Time. Registration details can be found in our press release issued on October 16.

Last, we remain heavily focused on controlling what we can across our business as we continue to advance our strategic objectives. Our focus is on enhancing operational execution, accelerating growth and strengthening our diverse product portfolio to better serve our customers. We are pleased with the progress on the separation of Teleflex, including prioritization of a potential sale of NewCo as interest remains healthy. Our guiding principles remain focused on maximizing shareholder value through this process.

That concludes my prepared remarks. Now I would like to turn the call back to the operator for Q&A.

[Operator Instructions] And your first question comes from the line of Mike Matson with Needham.

Yes. I guess I'll start with the China -- the comments on the balloon pumps in China. I didn't completely understand that. Can you kind of elaborate on that a little bit more?

Yes, absolutely, Mike. So what we saw in the quarter, we saw a stocking order of about $9 million that came from some of our distributor customers. There are really 2 reasons for this. The first is, as we're executing on our intra-aortic balloon growth strategy to address more of the geographic market, today, Mike, we cover about 30% of the market. And this expansion has been partly driven by the government changes, which recommends the use of intra-aortic balloon pumps and catheters for complex PCI procedures.

The second reason, Mike, there's been a little bit of noise in the market with tariffs, and this has driven customers' behavior changes that they're purchasing product ahead of tariffs as tenders are delayed later in the year. We expect this situation to normalize in Q4 as we sell through this inventory and even some additional out through the channel as we get these tenders in. So it's a timing thing in Q3, we just wanted to call it out for clarity.

Okay. Got it. And then -- just -- we saw some data at TCT on drug-coated balloons. And I know that you've got the BIOMAG trial underway with your resorbable stent. But that data won't be out until '27. I don't know when it would potentially be approved in the U.S.. But is there any risk here that you lose some share in the kind of legacy stent and balloon business to these newer drug-coated balloons in the U.S. and Europe, either from [ Boston ] Scientific or Cordis. And maybe can you tell us how much of the -- your -- the business you acquired, the Vascular Intervention business is PCI focused as opposed to peripheral?

Yes. Thanks for the question, Mike. We'll cover that probably more detail next week at our investor meeting. And I will say that in relation to the performance of our drug-coated stents in the quarter, it was in line with expectations. We're not seeing any impact.

And I would also ask you to bear in mind that drug-coated balloons have been on the market in Europe for a lot longer than they've been in the U.S. with the technologies you're speaking about. And you see -- still see, in conjunction with those technologies, you still see drug-coated stents being used alongside them. And obviously, with BIOTRONIK growing at the rate of almost 7%, that's very encouraging for the business that we just acquired, Mike.

And your next question comes from the line of Matt Taylor with Jefferies.

Sorry about that. I guess I was hoping you could comment a little bit further. The press release seems to suggest that now the sale is the primary focus for NewCo. Is the spin off the table? And I guess, can you talk about why you're so geared towards a sale? And do you think that you might be able to sell this at an accretive valuation?

Yes. Thanks, Matt. Well, Matt, I think as I said in my prepared remarks, in line with our commitment to maximize value for our shareholders, our Board and management have been taking decisive action and have been actively advancing the process for a potential sale of NewCo. As I sit here today, Matt, I am pleased with the progress that we have made in the stage that we are at in the separation. We continue to be impressed by the quality and quantity of buyer interest.

And to your question on valuation, in our view, it speaks to the quality of the assets within NewCo. As we discussed in our second quarter earnings call, we had preliminary meetings with many potential buyers that had expressed interest in acquiring NewCo. Since then, we have been actively advancing the process for a potential sale of NewCo. Momentum has continued and we have advanced the process into late stages of diligence, and are confident in our ability to maximize shareholder value as we prioritize the sale of NewCo.

In the second part of your question, is the spin off the table? I think -- again, I'll reiterate, we're pleased with the progress we have made and the stage we're at. We still view a spin as a shareholder value creation strategy opportunity, but the level of interest and momentum we have for the sale of NewCo is now our priority and we're executing against that.

And just on RemainCo, Matt, if I can just elaborate a little bit on it and its performance for the first 9 months. The constant currency revenue growth year-to-date through the first 9 months was approximately 5% year-over-year, excluding the acquired Vascular Interventions business and the negative impact of volume-based procurement, which we know is transitory. This is encouraging and is squarely in our mid-single-digit growth profile.

And your next question comes from the line of Jayson Bedford with Raymond James.

Maybe for John, John, there was a lot of growth rates thrown out there, and I'm not as -- I'm a lot slower than I used to be. What is the dollar amount of the fourth quarter revenue guidance?

And I'll ask my second question, while, maybe John, you're looking that up. Just on the spin/sale, the business has changed a bit since you last provided details on RemainCo and NewCo in terms of margins. Is there any way you can kind of update us maybe on the margin range and tariff exposure of the 2 businesses?

Well, the growth -- so the biggest impact in quarter 3. I mean, first of all, let me say, I was pleased with our performance in Q3. We executed well within the quarter and we delivered on our commitments despite the weakness in intra-aortic balloon pumps, which was offset by strength in surgical. And obviously, the newly acquired BIOTRONIK VI business performed very, very well within the quarter.

With regard to the margins on RemainCo and NewCo, there hasn't been significant change to the margins within RemainCo or NewCo outside of the impact of tariffs. And as we look at the tariff impact, I think data has been disclosed to the potential buyers of NewCo. So they are fully aware of that. The pump impact has also been disclosed to the buyers, that are fully aware of that. And we gave a good bit of detail in our prepared remarks on the tariffs with the reduction in what we expect for this year. So it's a somewhat improving environment and more stable for tariffs, at least, I would say. And I will ask John to answer your first question.

Yes, so for the implied Q4 is [ 9 30 to 9 45.6 dollars ]. So that's a 14% to 15.8% constant currency, and we have about a $21 million FX tailwind there.

Your next question comes from the line of Richard Newitter from Truist Securities.

This is [ Ravi ] here for Rich. Liam, just kind of maybe one for me upfront and then a follow-up. Just kind of on the vascular business, your restructuring, you have kind of a pretty significant new product trial underway. I'm just curious, and I don't know if I'm stealing any thunder from the Analyst Day, but just curious, do you need any other kind of maybe flagship products in this division to really kind of accelerate growth behind that [ billion dollar ] revenue base that you have? Just any thoughts there would be appreciated. And one follow-up.

Yes. Thanks, [ Ravi ]. Just for clarity, that's our interventional business that you're talking about. I'll start by saying it's only one quarter, but it's a very encouraging start for BIOTRONIK growing almost 7% right out of the gate. That was ahead of what we had anticipated. So we feel good about that. We have -- and if you look at the underlying growth in the quarter of the interventional business, again, as we said in our prepared remarks, next to BIOTRONIK VI acquisition, it grew at around 9%. So again, it's performing very, very well.

We have a suite of new products coming into the portfolio in that business to continue to accelerate the growth. And as part of RemainCo, the interventional business will be a strong driver, and we anticipate it being in the upper end of those mid-single digits that we spoke about.

So I don't think we need any additional flagship product in order to achieve our goals. We have a number of products that we will be releasing into the portfolio. And we will be driving investment into the business to expand and to grow that and we'll be investing in R&D. And M&A will be something that will be a future opportunity for this business. I think it's important for Teleflex that we execute as we go through 2026 and prove out our hypothesis through 2026, deliver that mid-single digits and bring confidence back into the stock.

Great. And then just one on the tightening write-down. Commentary in the last couple of quarters was acknowledge challenges in bariatrics, but that was a product that was doing pretty well, it seemed to us, at least is stapling. So how do we think about maybe the growth rate in that business on a go-forward basis for the segment?

Yes, Ravi, I'll give you the growth rate for the quarter was in the upper single digits. So the product is still growing, and we anticipate it to grow into the future. I'll let John comment on the restructuring. But at the end of the day, if the base is lower, even though it is growing and that has put a little bit of pressure and has caused the write-down. But John, do you want add anything?

Yes. I mean I won't get into the GAAP technical because this is around intangible assets, which is a little different than a goodwill impairment. But it's that near-term view obviously affects the longer-term projections. And while GLP-1s still put a lot of pressure on this product, as Liam noted, it continues to grow. It's just not growing at the rate that was in our original plan and when we did the acquisition. So unfortunately, it did require a write-down in these intangibles.

And your next question comes from the line of Matthew O'Brien with Piper Sandler.

This is Samantha on for Matt this morning. I guess if you could provide any more details on the potential sale of NewCo, it kind of makes it sound like maybe things are advanced with one potential buyer, maybe a few. And also whether this is still being considered sold as NewCo entirely or kind of in parts?

So I'm not going to get into the details of the number of buyers or anything like that. I will tell you that we are focused on selling the entirety of NewCo. We have made significant progress. We have -- trust me, we have not been sitting on our hands. We've been working tirelessly towards this end goal. We have -- and we are in the later stages of due diligence.

I will tell you, with a number of buyers we're in the later stages of due diligence as we start -- as we progress this through. I did outline on the second quarter earnings call that we had done preliminary meetings. Since then, we have done a number of meetings, a lot of due diligence, dug deep into the business and had ongoing conversations with multiple buyers. We feel at that and we've done an incredible amount of analysis on this, both externally and internally, that they are guiding principle of maximizing shareholder value will be best realized at this stage through -- an exit through a sale. We think that would be the best outcome for our shareholders, and that's why we prioritize the sale over the [ spin ] at this time.

Great. And if I could have one more just on the intra-aortic balloon pumps. I know you talked about how this was expected next year, but was kind of like brought forward. Can you talk a little bit more about the longer-term outlook for these products? And then specifically, how long the catheters that go with them could see that -- could continue to be a growth driver?

Yes, Samantha, that's an excellent question. I mean I think if we just take a step back and we refresh everyone's memory, this is a $250 million annual market split between pumps and catheters. We began with approximately 1/3 of the market share, less than 1/3 in the United States and more than 1/3 overseas in Asia. We had the -- we were taking significant share before the competitor issue, with the business growing organically strong double digits. Customers began replacing their pumps due to the FDA notice, and we also saw pull forward in conversions, which expanded the market during this time.

We executed that strategy well. Even with the bolus that we picked up in Q4 of 2024, we delivered $70 million in Q4, which was significantly up from '23. And then we -- this year, it should be in the United States, these numbers are, it should be around $80 million this year in the United States.

And we drove really strong growth in the first half of 2025 and we expected that growth rate to continue into the back half, but conversions have slowed earlier. We thought it would happen in 2026. We were expecting this to be a little bit of an overhang in 2026. And our change in assumption is just as a result of the conversions happening earlier than we had anticipated.

Your question on catheter, we would anticipate catheter growth to be with us for the last number of years. And in Q3, I mean, the catheters grew strong double digits in Q3. And obviously, we've increased our market share in the United States fairly significantly during that time.

Your next question comes from the line of Patrick Wood with Morgan Stanley.

Slightly random one at the start. The BIOTRONIK Vascular business, obviously, nice to see that coming in solidly. How is like employee retention been there? How have they been integrating like have you managed to keep them on board, like basically the kind of more squishy qualitative stuff of how that's going?

Yes. Thanks, Patrick. Look, the integration is going very well. I think that the BIOTRONIK VI employees, being part of Teleflex, they see it as a much bigger interventional portfolio now. I mean, we're heading for $1 billion of an interventional business for RemainCo with an excellent growth outlook. So retention has been rock solid. We haven't lost any of the senior leadership as we've gone through this, and I'm very encouraged by that. The team is robust, especially from a technical and R&D capability. I've been with them a number of times, and every time I meet with them, and I'm always impressed by their capabilities in R&D and the innovation that this team can drive.

Super helpful. And then just quickly, obviously, we're still seeing very strong prestige volumes and we're also seeing a whole bunch of incremental procedures moving into the cath lab that maybe are being done there before. You guys have a very broad-based view of the system as a whole. So how are you feeling about volumes, both in and out of the cath lab and the health of the market from a procedural standpoint as well?

Yes, it's a great question. I mean, if I look at what I saw with BIOTRONIK growing 7%. If I look at our interventional business outside of the BIOTRONIK VI growing at 9%, it's clear that the cath lab is a very healthy place to be right now, driving good solid upper single-digit growth in our current portfolio. Procedures are stable to improving in that area. There's lots of technology coming into that area. And we ourselves, like the optionality of the technology we're going to bring with Freesolve into the future and to partake in that leave nothing behind them. We're very excited to explain how the BIOMAG study is going to the investment community in a couple of weeks. So yes, we see this as very stable, Patrick, would be, however, and good solid growth coming out of the cath lab area.

[Operator Instructions] And your next question comes from the line of Travis Steed with Bank of America Securities.

This is [indiscernible] on for Travis. On BIOTRONIK, you've spoken about expanding your reach in EMEA with them contain their exposure. Maybe the first part of the question, are you seeing early wins there with the expanded bag? And then on the realignment and head count reductions in the sales force, is that going to be more geographically focused in the U.S. or kind of broadly across the world?

Yes. So it's too early, [ Ein ], to give you a clear view on whether we're seeing synergies yet within the sales force. We've seen some anecdotes, but I don't want to call it a trend yet, where some of our complex catheters and some of their stents and balloons have been brought in and combined with some users. We had a lot of excitement in TCT with regard to the overall portfolio.

With regards to the integration and the restructuring, a lot of that is in the, I would call it, in the back office areas where the synergies are coming from. And the integration, obviously, some of it will be in the commercial organization for sure. But I don't want to get into any more details on that on the call.

And I would now like to turn the call back over to Mr. Lawrence Keusch.

Thank you, Kayla, and thank you to everyone that joined us on the call today. This concludes the Teleflex Inc. Third Quarter 2025 Earnings Conference Call.

You may now disconnect your lines.

All right. Let's kick it off. Thanks so much, everyone. [indiscernible] at Morgan Stanley Global Healthcare Conference. Patrick [indiscernible] from the Medtech team. I have no idea whether with disclosure thing goes, but it's morganstanley.com/researchdisclosures. Given I've read that out about 20 times now today. So I'm sure you can all go down and have a really good time. But what is good at is Liam have over from Teleflex, the CEO. So thank you so much for agreeing to do this.

It's our pleasure to be here, and thanks for having us.

Yes. I appreciate it. I mean predictable topic to start with. You guys announced they recently a lot of changes, one of which was the strategic decision to reorganize the business from a SpinCo RemainCo in that whole process, what are we up to at this point?

Yes. So first of all, I'll just start by saying our North Star guiding principle is to release shareholder value. So we began this process. So we announced the separation on our Q4 earnings call. And we said we were going to separate through a spin, knowing that we anticipate we get some inbound interest and when we got to Q1 earnings call, of course, we had inbound interest. And then as recently as our Q2 earnings call, we updated the investment community on that level of interest.

So again, we're encouraged by the quantity and the quality of the inbound interest. We have engaged as we're on this parallel path with the interested parties. We have held management meetings. Internally, we've identified the management team is going to be running these businesses. the President of these businesses. We've a CFO, CHRO identified for -- to run that. We have the data room established. We have also, obviously, as I said, had the management presentations with these groups, and we continue to interact. So we are firmly on a parallel path right now. And as part of that parallel path we are, at this moment in time, focused on the separation through a sale, but a lot of that work will obviously benefit the separation through the spin as well.

Like I said, our North Star will be shareholder value. We know what our tax basis is. We appreciate that the spin is a tax-free event for our shareholders. But also we see now with the inbound interest of value that is being ascribed through the interest at least to these assets. And it does reinforce our philosophy. These were good assets at the outs, and that is reinforced by the level of interest that we're having. So we're firmly on the parallel path to answer your question where we're at. We're engaging with the individuals. If it's a separation through a spin, the time line would be mid-2026. That's when we do that and also separation through the sale will be sometime in 2026 as well.

To try my log. On interested parties, is it more of the like entirety of the asset? Or parts that will go to different assets or next year? Or how is that looking?

It's a mixture, but the majority of the interest is in all of NewCo. And obviously, a singular transaction would be easier to execute. But the majority of the interest is in all of NewCo. And given the level of interest, I think that's a distinct possibility either that our separation through the spin will be the possibility. And I think we have a mixture of financial sponsors and strategics within that. So that results are quite encouraging.

Got it. And then how are you thinking -- if it were to be a sale, we discussed it a little bit how you think about use of proceeds.

Absolutely. So it were to be a sale, and we've outlined this also on our Q2 earnings call, we would use the proceeds to pay down debt and to return capital to shareholders. That would be the 2 key uses of the proceeds. And nothing has changed. That would still be our goal to do that.

Maybe pivoting to the other change, obviously, electronics vascular business, which I guess is now your base business in that way. It's very early, I get that. How is the initial integration rung?How are you finding things.

So it's 10 weeks, going well. We see the 2 teams are working very strongly together. We have aligned on the manufacturing strategies with the footprint and so on and so forth. We have had several integrations with the sales and commercial entities. We have mapped out the process for cross-training on the different products. and it's been really strong collaboration between the 2 teams. It is still running reasonably independently. It's only 10 weeks, and we're going to take our time and integrate it thoughtfully and bring it into the business.

But the good thing is 10 weeks in, no surprises. I think that the business has the potential to do exactly what we thought it would do on our Q2 earnings call. So we're encouraged by what we put forward. And as we outlined on the earnings call, the business should give us around over $200 million in the second half of the year, $99 million in Q3 and the remainder in Q4, there is some seasonality involved in that. So early days, but very encouraged so far.

You've done in time, quite a few deals and integrations. So you've got a lot of experience in this area. How are you finding like the people getting onboarded, attrition rates, like how happy are they? What's that level like?

Yes. I think nothing to point to in attrition rates. All of the key leadership team have transferred across to Teleflex. I think in general, the team is happy to be part of the larger med tech company. And I think that they see the possibilities of the combination of the suites of products being part of Teleflex with our interventional business. So I would say that the mood in the Biotronic BI business is pretty positive. I think the move in the Teleflex camp is pretty positive as they come together and no surprises in attrition. The individuals that moved across 10 weeks later are still very much engaged with us in driving the business forward.

Got it. I mean, you're mentioning the product synergies, how do you think about like some of those cross-selling opportunities like I think, PK Papyrus and then Ringer and like maybe paint the audience some of the opportunities in that. Not specifically, but in the product synergies.

Well, the market that we're addressing is a $10 billion market. So the market possibilities are fairly significant. And there are a number of synergies that we believe that will bode well for both businesses. those geographic synergies and this product synergies. And then there is also segment synergies that I think -- and I would look at this very much like the Vascular Solutions business that we bought in 2017. As we integrated that business, having a broader portfolio, having broader access to the cath lab, really accelerated the growth in both businesses.

So if we start with the product synergies and you mentioned PK Papyrus and Ringer in CTOs, perforations happening in approximately 3% of cases. And in PCI 0.5% of cases. And if you have a perforation, it's obviously an emergency event that needs to be addressed. And our product, the ringer can be used to actually address the perforation to allow you to continue the procedure. You now don't have to withdraw all of the devices that you're using, so you can place the ringer catheter, continue with the procedure, as you would have normally it makes it safe and effective to do that.

Then as you exit, you remove the ring and you grab the PK Papyrus from the Biotronic BI business and you see up the perforation. So there's a logical synergy that you can dominate this segment, this niche within the space that is probably $120 million market opportunity for the combination products. And then our complex catheters, which had an excellent Q2 Interventional is slightly better than we anticipated and the complex capitals drove that. They give you access to very torturous anatomy.

And the drug-eluting stent from Biotronic is one of the most valuable stents to get into those small arteries in order to assist. So that combination also helps. And then if you think about it geographically, 50% of the Biotronic business is in EMEA, 25% in the Americas and 25% in Asia Pacific. Our focus and our business is strong in the United States. So the Biotronic VI sales organization will actually help us penetrate our markets in Europe whereas we will help them get access to the cath lab. That was one of the things we saw with the vascular the VSI integration, but getting that access to the cath lab when you're a bigger player is very, very helpful and the reps call it wearing the lead where they're actually wearing the lead in the cath lab as they're going through the procedures.

And then the third synergy that we see, we have products within our portfolio that are indicated for peripheral vascular but we don't have a channel. Whereas now, as we integrate the Biotronic BI business, we'll have a channel for those products. So all in all, I think there's synergies on the Teleflex side, the synergies on the Biotronic side and there's also synergies from a product and geographic perspective.

Did you clarify that's particularly interesting. I mean how do tooken practice? Like you go to the reps and you say, your bag has just expanded massively. Do they like -- is there like a training process where they get explained? How does it look like in practice?

So in practice, what normally happens in this scenario as you integrate the 2 sales organizations over a period of time. You define the training program for the Biotronic salesperson and the Teleflex salesperson. So you cross-train them on the key products that they're going to be selling. That normally takes 2 or 3 months just to get through that type of a process. And then what you normally do is you will shrink the territories.

So they spend more time in their specific call point in their specific and you try and shrink the territories insofar as that the person with the strongest relationship keeps that hospital so that you're able to continue to drive those revenue synergies through that. And then the other thing that you do is you look at it geographically, where Teleflex has a direct presence in almost every country was some of these smaller companies might not be using a distributor.

So there's an opportunity for us to take that business in and bring it into a direct channel. And we always find as good as the distributor is in some of these geographies, in particular, in Europe, there is the possibility for us to accelerate the growth once we take it over.

So for me is that [indiscernible] bigger bag, narrower focus in territory, and I have my numbers because I've got the depth within the accounts [indiscernible]

Absolutely. And you can spend more time on a broader portfolio with a specific customer and you build that relationship deeper.

Right. [indiscernible] up and moving around content that makes total sense.

They call it windscreen time. So you're trying to minimize windscreen time where they're actually sitting in the car but that are actually in the cap level and driving from account-to-account.

So hip and me, I saw a study and said that was about 30% of the rep's time was windscreen time. So it was very high, it was interesting.

I'd love to hear a little bit more about [indiscernible]. That's another asset that was super interesting, pretty unique. Maybe give people a little bit of a background of how bioresorbables capitaling works and that's...

Yes. So what [indiscernible] is a product that is -- has a CE mark and is currently going through a clinical trial in Europe and we'll go through another clinical trial in the United States to get approval. It's a bioabsorbable surolimus-coted scaffold made of magnesium.

And I was going to use me as an example, but you're way younger, they'll be Patrick. So I'll use you an example. So it gets absorbed into the body after about 12 months. And it's been derisked by the first clinical study we did in 14 centers where it was not over 99% absorbed into the body after 12 months. There have been previous scaffolds that were made of plastic materials. And they were more difficult to manipulate and to place correctly. And the other issue with the plastic scaffolds was it took them 4 years to absorb.

So let's say you're a younger person and you have a coronary event. Today, they would put a stent or a number of stents into that person. The likelihood is that, that person is going to have more complications in the future. The issue about having a stent is you can't put a stent across palatestent. So this is a scaffold that actually addresses the issue but also is absorbed into the body. So after 12 months, it's fear. So if there's another issue that arises later on, you can then go in and do a follow-up procedure and it didn't burn any bridges.

So that's -- and it also addresses a key trend in interventional cardiology and peripheral vascular procedures today leave nothing behind. So you're not burning any bridges and it gives you an opportunity to go in and do further procedures in the future. So we're excited about. It gives us nice optionality. The BIOMAG-II study is in Europe. It's 2,000 patients. We're tracking well in the recruitment of these patients. Once that is completed, I think that will give us an opportunity to expand that product within Europe. And we will kick off the study in the United States in 2026 and start recruiting patients in 2026 in order to get approval for this product in the United States. So that's our intent. And it does give us nice optionality for a new technology really focusing on that trend to believe nothing behind within the interventional cardiology procedures.

It's been a while since we've seen intervention in the stand side of the market. So I think people will be paying quite a bit of attention.

Yes, I hope so. I mean I think that the European clinicians are quite excited about it. We do plan to have an Investor Day on Biotronic in the autumn in the fall to explain the assets to the investment community. And at that stage, I think we will have a couple of clinicians who will go through the core portfolio and also talk a little bit about presales and explain it. so that people can get a better understanding of what the Biotronic BI assets and why we believe they're going to be meaningful to tell a flip.

That's awesome. I feel like people haven't looked at DCBs or GDSs for a long time in a way. So I think it'd be pretty useful.

Yes. And I think that it opens up a new market for lesions and it is a unique application in that regard. So I think once we prove out the technology, I think it does represent a nice opportunity in the future.

Pivoting to RemainCo, like the core business, let's say, x Biotronic, how are you thinking about the growth there? You guys have flagged at 6% as a growth range. How much of that is just a core cash lab volumes? Like what are the big puts and takes on the growth of the core business?

Yes. So the RemainCo, which will be Teleflex ultimately, we believe it's capable of growing at 6%. The total addressable market that we're going to be addressing is in that $30 billion market, $10 billion of that is the Interventional Access portfolio. If you look at that mid-single-digit 6-ish percent growth rate, I think that the surgical business and the vascular business are capable of growing within that range. And I think to your point, the interventional business simply because, number one, you have a faster growing market.

Number two, we have a lot of innovation coming through that portfolio is capable of growing above that average, and therefore, resulting in that 6% growth rate. And I would say that for RemainCo, if you exclude in this year 2025, if you exclude the impact of volume-based procurement in our Surgical business, then RemainCo is growing and those upper in 2025.

So I think the portfolio is well capable of doing it. I think it's -- we need to prove it. That's going to be key. In 2026, I think it's important that we focus on execution on delivering good solid top line growth with -- for RemainCo with earnings horsepower to boot to go with that.

Maybe diving into some of those like vascular and sort of thought how do you think about midterm vascular growth? What do you think is potentially driving the step-up in growth in the second half of this year, love to dig into that.

Yes. There's a couple of things even in the shorter term. And this year, that's going to drive some improvement within vascular. First of all, we're going to continue to penetrate the PICC market and you'll see that improving in the back half of the year. EZ-IO had a really tough comp in the first half of the year. So just due to some military orders, and you'll see that improve in the back half of the year. And then we have some timing of some distributor orders, in particular, in EMEA and Asia Pacific that we should see accelerate in the back half of the year.

And then as you go into 2026, obviously, the endurance catheter we returned to the market. And in 2027, in our emergency in our emergency medicine group, which will be within vascular, you will have EZPlas hopefully coming to the market sometime in 2027.

The -- on the PICC side of things, I know you guys have had a semi success taking share. Is that still happening?

It is, yes. Even in Q2, it grew double digits. And really, it's because of our coating technology. hospitals now have to report infections on PICCs in the same way as they have to on central venous catheters. And our coating technologies anti-thrombogenic as well as being antimicrobial, and that gives that reduces infection rates and that ultimately saves the hospital money because they don't get reimbursed anymore for infections that are called within the hospital from a catheter that is noncore.

The -- maybe we pivot to interventional. There's a lot of moving parts in there. How are you thinking about things like on control and on the complex catheters and IBP? How you think about the growth of the division overall?

Yes. So our interventional business has performed very much in line with our expectations through the first half of the year. I think we continue to take share within the balloon pump market. Obviously, we have the competitors off the market for this period of time. I think as you go into the second half of the year, we have a tough comp in Q4 because that's when this began. But I am encouraged by the performance, in particular, as we saw in Q2 with our complex catheters and with our uncontrolled product. They had solid performances in Q2.

Now investors need to realize that when you get into Q3, Biotronic will be merged into that business, and that will be approximately $99 million in Q3. But all in all, we're encouraged by the performance of our overall interventional portfolio, and it bodes well for the future.

Sounds cool. You mentioned before, China VBP sort of disguised a lot of what was going on there. But maybe for staff, putting VBP aside core business, things like tightened been to our margin really well comparative in the market. What things been driving that?

So I think the overall bariatric gastric sleeve market is showing modest declines just due to GLP ones. But the heightened the state will grow double digits this year. And so therefore, it's an opportunity for us to take share. We're really supporting that product with robust clinical data. We just had a clinical study that demonstrated the reduction in GERD. Prior to that, we had a clinical study that demonstrated that by using the Titan staple the 23-centimeter single stapler line reduces operating time and has excellent clinical outcomes.

So if you're able to reduce time in the hospital environment that is valuable to the hospital because it can mean that they can get more procedures into that operating room. I also think the product is performing exceptionally well. And even though there are less bariatric surgeries done today than they were 3 or 4 years ago, it is still a very big market.

So -- and therefore, is an opportunity for Teleflex to continue to penetrate. I think also within the surgical business, I think our core surgical business with the exception of the volume-based procurement is performing well. And there are some new products coming in '26 and '27. And we have the automatic polymer replier. We have a new clip coming in the future. And volume-based procurement in China will be transitory. So that should be broadly behind as we get into 2026.

Not to put you on the spot, but the -- how sustainable are the share gains on the stapling side? Because 1 of your peers called out as the very are but then to them, also robotics and -- but their growth rate is wildly different to yours, basically 0. And there's a narrow too there that maybe they haven't invested enough in the assets that they had acquired. And how should we think about the share gains in state point over time?

So the Titan state can be used in conjunction with the robot. And many of our surgeons do use it in conjunction with the robot. The -- what surgeons find when you're doing the traditional staple lines as you were putting -- you take the arm out load and go in, take armored go in, whereas if you have one additional [indiscernible] you use the Titan stapler you -- it's a single shot and you do a full line, and therefore, you don't have crossover of staples. And that's ultimately why you've less bird because the staple line don't cross each other, causing that card.

So I think that there's definitely a trend of increasing robotics in every surgical procedures. But our focus has been in partnering with those robotics to enhance the procedure to drive efficiency and again, to save that time, being able to do a single line of staples in 1 go, saves time has great clinical outcomes, and therefore, is an opportunity for us to expand that market. But the competitor, I have some sympathy for it because the market is not growing like it was a number of years ago.

You should pick saw office, not of all states work. We can do well. The -- I mean China VBP is 1 of those compacts that has been around so long, and it seems to rotate different categories periodically. It's an impossible thing to ask. But like are we approaching the NP you guys in terms of like which categories, how much longer of this do we have, do you think?

So of our total portfolio, where you have -- and you have to have a local competitor in order to have volume-based procurement. So of our total portfolio heard as an established competitor, we feel we're through now. All of our portfolio has been through. So I think for us, it is -- we've been through it all. It's painful. There's no getting away from it. It's painful. You work to get the volumes and you lower your pricing in order to get there. But I think the team has executed really well on the surgical volume-based procurement and having participated in the tender have been one of the winners of the tender. I think they've done a nice job in gaining the volume that was associated with that tender.

So I'm glad we're through the Patrick, I'm not going to lie because there's a lot of uncertainty as you go through that. And I think we called it with the impact. So -- and I think it's clearly going to be transitory as we go into 2026 will be up the size, and I think we're done. And what we've seen in the China market is the government themselves realized at the initial stages of volume-based procurement that might have gone a little bit too deep and it impacted that alone the international companies, but the local companies.

And on the second round of those first few products that went through, they've actually gone back and that we've seen some price increases that didn't involve our products, but that's what I hear from the market in China. The pricing has increased modestly on those products.

Good to hear. There were some categories, not the rand others, which were just iterated -- you don't know how anyone could make any money in. No, that's really interesting. Maybe just pivoting a little bit to SpinCo. Bagel was a highlight and has been a highlight for that business. How are things going on that side?

Barrage continues to do exceptionally well. And for those who don't know, Barrage spacing technology is men go through radiation therapy for prostate cancer. It creates space and, therefore, protect some of the organs, so you don't have ancillary damage. It continues to grow really, really well through this year through the first half of the year, and it has momentum into the back half. We just got approval in Japan, and there's obviously reimbursement available there in Japan as well, where we continue to educate doctors, and it's a 2 call point. It's a urologist and it's also the interventional radiologist does this.

So we're educating the urologists that we know and also interventional radiologists on the need for spacing and we're continuing to convert that white space. Obviously, there are some competitor gains as you go through as well. But it's a big market with a nice opportunity. and we're expanding the indications for Barrage for post-radical prostatectomy because after you've had a radical prostatectomy in about anything from 16% to up to 50% of times, the cancer comes back.

And this will be a unique opportunity for Barrage to create space and the competing technology cannot be used because there's nothing to dilate. So this will expand the market by $100 million. and it will be exclusively accessed by the [indiscernible] product.

It's pretty much still just the 2 of you, right, in that market. There is 1 other balloon company there is -- which is a much smaller player. But other than that, yes, there's 2 main technologies, I would say, in the marketplace. Yes. And then 2 more assets in [indiscernible] OEM housing is going.

Yes. OEM. OEM has performed as we said. We said that Q1 would be the low point. We saw an improvement in Q2, and we expect to see an improvement in the back half of the year. investors that will be familiar with Teleflex will know that Q3 last year, we announced a -- we announced customer vertical integration as well as an impact of inventory management. So we will have anniversaried that as we get into Q3. So that will see an improvement in the OEM business.

We've seen order rates improve as we've gone through the year, which tells us that we're getting close to the end of the destocking. Obviously, we need to continue to execute as we go through the end of the year. And we have a nice bolus of new business in the pipeline as well for the OEM business.

So I feel pretty good about the OEM business. Still obviously, it's had a heavy decline in the first half. In the full year, it's going to be a declining business in the low double-digit range. But notwithstanding that, I see a good pathway to recovery in 2026.

And then the big edge market overall and how you feel things are going there?

So on the BPH market, obviously, we have UroLift, which has been majorly impacted by the change in reimbursement 4 years ago, and this is the final year of that reimbursement change. And the new rule came out just recently the proposed rule. So it's not -- it's not the rule yet. It's the proposed rule. But it's very encouraging for Europe, especially in the after-side, service where we've seen significant declines. It basically doubles the profitability of [indiscernible] from that office side of service.

And as investors are familiar with Teleflex will know that's what we used to expand the market when it was a procedure that was viable in the office side of service. So we're encouraged by that, assuming that it becomes the rule rather than the proposed rule. And normally it does, we'll know in October. And I think that should really help UroLift and allow us then to go back out to those urologists in give them the information about the reimbursement.

There's many urologists out there that believe in the procedure, believe in the outcomes of the procedure, believe in the clinical data, want to do the procedure in the apple site of service but simply because of the profitability, but weren't in a position to do so. So I think this gives us an opportunity to go back to those doctors and reengage with them with UroLift in the opposite of service. So we're encouraged by that, and we think that at long last, we might begin to see the bottom of the UroLift decline.

Maybe just to pivot back to the cath lab because you guys have such a multi-factors exposure to that market. When you have a discussion with the customers and outside it, how do you think capacity is for new procedures? Because at least from our perspective, we see so many different procedures now increasingly moving into the cath lab. How much space is there to keep growing there without...

A lot of these procedures that are coming in are actually driving efficiency at the same time. So there's -- and we just launched a product last year that is a combination, it's a Watson catheter. So instead of the clinician having to use 2 products, which takes time to insert in the patient, you combine that into 1 product. So it saves some time makes them more efficient, make the capital lab more efficient.

And this is why I think if we look at RemainCo and the interventional business being the biggest part of RemainCo, it is a space that is ripe for innovation. Innovation that improves clinical outcomes for patients and innovation to drive efficiency within the cath labs and that you can actually do more procedures in the cath lab. So I think I think the interventional cardiology space is an exciting space for many companies, Teleflex being one of them.

And I think our portfolio of products, things like free sales that have the potential to make a significant difference to clinical outcomes and allow further treatments down the road for that category of patient and not burn any bridges, I think there's always capacity in the cath lab to those types of procedures.

You guys are spinning at the moment, a lot of places simultaneously. If we had to pick 1 thing that is on your mind, the most from our day-to-day job in whatever field, what's the 1 thing that's the most on your mind day today?

So right now, it's the separation because -- and we are busy. We have a lot of plates. I think -- and I talk to my team regularly and I'd say, okay, just remember, you've got a lot of balls in the year, just remember which 2 are the glass ball. You don't drop them. And right now, for me, the glass ball for me are the separation. I got 3 actually you got the separation.

You got executing on your plan for the year, and you've got the integration of Biotronic BI business. And if we do those 3 well, I think our year would be fine. But the organization has demonstrated it has enormous capacity to do more when asked. And I think, in particular, our finance group have been incredibly busy because we've had to do quality of earnings for the separation. We've had to do full P&L breakouts. We've done management presentations we have engaged with the other side.

So there's a lot of things that we've been doing on the separation but at the same time, making sure that we integrate Bilectronic VI business appropriately and executing Q1 and Q2 at the same time. And I think we've been able to keep those balls in the air. And I think we've been able to keep the glass ball going as well.

We're doing better than [indiscernible]. Liam, thank you so much.

Thank you very much.